{shortcode-89eed307d244ae795c940ecf58dfc03f5bfb2e6c}Harvard Management Company’s real estate team officially became part of Boston-based private equity firm Bain Capital Thursday, finalizing a move months in the making.

Harvard’s 22-person real estate team, led by Daniel W. Cummings, will continue managing the University’s more than $3.4 billion portfolio—but as Bain employees. The group may incorporate portfolios for other investors, the Boston Globe reported in December.

HMC CEO N.P. “Narv” Narvekar first announced that he expected the real estate group would spin out to an external manager in a Jan. 2017 letter sent to Harvard affiliates. The merger with Bain was anticipated for weeks before Bain Capital officially announced the move in December.

Harvard’s real estate team has performed well in the past. In his September letter, Narvekar cited real estate returns as a source of endowment growth. In fiscal year 2016, real estate saw 13.8 percent returns on investment, while the overall endowment shrunk. At the time, real estate comprised 14.5 percent of the endowment.

The NACUBO-Commonfund Report on U.S. college and university endowments, released last week, found average private equity real estate returns for 2017 of 7.3 percent compared to average endowment returns of 12.2 percent for the 809 institutions surveyed. Harvard trailed the national average with 8.1 percent returns overall.

Since Narvekar took over as CEO of HMC in Dec. 2016, outsourcing funds to external managers has become a mainstay of his strategy to restructure the endowment—last January, Narvekar announced he planned to lay off nearly half of HMC’s staff. Several hedge funds have spun off this fiscal year.

Experts told The Crimson when the Bain spin-off debuted in December that the move was emblematic of Narvekar’s strategy. Analysts also suggested the spin-off would benefit all parties.

Charles A. Skorina, the leader of a financial executive search firm, said the move could allow Harvard’s team to work better and help Bain invest in real estate.

“I think it is an excellent move, just brilliant,” Skorina said. “I think this is a win-win—this is good for the school, for Harvard Management Company, and for Bain.”

—Staff writer Eli W. Burnes can be reached at eli.burnes@thecrimson.com.