When Jane Mendillo returned to Harvard in July 2008 to run the university's $33bn (£19bn) endowment fund, she inherited some risky bets and some not-so-liquid investments made by predecessors that would make it much harder to navigate the global financial crisis that was just about to unfold.
Ms Mendillo, the first woman chief executive of the Harvard Management Company – one of the most high-profile jobs in fund management – had a baptism of fire in the role as the endowment lost more than 25 per cent of its value in her first year.
Amid the turmoil, Ms Mendillo overhauled and repositioned Harvard's investment portfolio, strengthened risk management, took a more cautious approach, hired fund managers and brought control of more of the endowment's funds in house.
The results of her actions have steadied the ship at Harvard's investment arm and produced consistent, if unspectacular, returns.
As Ms Mendillo announced this week that she would leave her job at the end of this year, Harvard lauded her achievements and said the endowment had delivered average annual returns of between 11 and 12 per cent for the five years to the end of June.
Ms Mendillo said she was proud of what she and her team achieved in the past six years.
"The team's dedication, creativity, talent and sheer hard work in the face of, and following, the financial crisis has led to a dramatic recovery and a portfolio that is once again firing on all cylinders," Ms Mendillo said. "The work HMC is doing today – on everything from asset allocation to internal trading, to direct deals, to fund investing, to investment opera- tions – is better than it has ever been."
The Harvard fund now manages about 42 per cent of its money internally, up from 30 per cent.
Harvard went to great lengths to stress how Ms Mendillo had "improved alignment of the endowment's risk/return profile with Harvard University's goals and liquidity needs" and "strengthened and expanded internal management and direct investing … bringing greater transparency, control and cost-efficiency".
Harvard said Ms Mendillo had "heightened focus on attractive investment themes such as natural resources, emerging markets and real estate."
When Ms Mendillo joined the endowment she replaced Mohamed el-Erian, who departed Harvard after two years to return to bond fund giant Pimco, where he was seen as a successor to Bill Gross until he surprised financial markets by resigning in January.
Before Mr el-Erian, Jack Meyer ran Harvard's endowment for 15 years and helped it grow from less than $5bn to more than $20bn.
Harvard's president, Drew Faust, said: "Jane has repositioned the endowment and re-established a world-class investment platform to support Harvard and all of its activities for many years to come.
"Jane has strengthened risk management and operations, introduced new ways of thinking and investing into the portfolio, and has fostered greater alignment with the university."
James Rothenberg, the chairman of Harvard Management Company's board, said: "She elegantly managed the endowment through the financial crisis and attracted a broad slate of high-calibre professionals to strengthen the organisation and position the portfolio for strong, long-term returns. I am very sorry to see her go."
Ms Mendillo has worked a total of 21 years at the Harvard Management Company, although she left from 2002 to 2008 to be chief investment officer at Wellesley College near Boston.
In 2008 and 2009 she was named on Forbes' list of the 100 Most Powerful Women.
Ms Mendillo plans to pursue personal interests including the arts and is not seeking another fund management position. Harvard has started the search for a successor.Reuse content