BOSTON Aug 13 Harvard Management Co, which oversees the Ivy League school's $32.7 billion endowment, took a new position in surgical device maker Covidien Plc during the second quarter before news of a planned takeover helped push the stock price higher, a regulatory filing shows.
Harvard said it owned 400,000 shares of Covidien, which ranked the company as Harvard's sixth largest U.S. stock investment, making up 3.82 percent of its portfolio, the filing made with the Securities and Exchange Commission last week shows.
Large investment managers are required to report their stock holdings 45 days after the end of the quarter in a so-called 13F filing. Many investors, including prominent hedge funds whose holdings are closely guarded, wait until the deadline on Thursday to file their holdings.
Medical device company Medtronic Inc plans to pay $43 billion for Covidien and move its headquarters to Ireland, where Covidien is based, to take advantage of lower corporate tax rates. The takeover news sent Covidien's share price up 20 percent, and the price has gained 27 percent since January. On Wednesday, Covidien ended up 2.01 percent at $86.72.
Harvard also took new positions in Protective Life Corp and Hillshire Brands and sold out of Beam Inc after the company's stock price surged early in the year thanks to news of takeover by Suntory Holdings. Harvard trimmed its stake in Hudson City Bancorp, which still remained Harvard Management's biggest holding.
Harvard's investment picks have long been watched closely, but scrutiny reached new highs recently after Jane Mendillo, Harvard Management's president and chief executive, said she would be leaving at the end of the year. Last month, Mendillo defended the endowment's relatively low 11 percent allocation to publicly traded U.S. stocks during the stock market's long bull run.
Data show that investment performance at Harvard has lagged its main Ivy League rivals in the five years that ended June 30, 2013, researcher Charles Skorina has said. (Reporting by Svea Herbst-Bayliss; Editing by Jonathan Oatis)