* Spent 18 years at world's biggest endowment
* Managed portfolio of $4 billion in PE capital
* Highly influential with other investors
By Gregory Roth
April 12 (Reuters-BUYOUTS) - Peter Dolan, the director of
private equity and venture capital for the Harvard Management
Company, manager of the world's biggest endowment, stepped down
on April 10. The departure comes at a critical time for the
endowment's $4 billion private equity portfolio, which is set to
expand as the university shifts to a more aggressive approach to
the asset class.
Dolan had worked for Harvard Management Company, which
oversees the university's $30.7 billion endowment, for 18 years,
joining the unit in 1995. On an interim basis, Dolan will be
replaced by John Shue, according to a person familiar with
Dolan and Shue did not respond to calls seeking comments. A
university spokesman also declined to comment, saying that
Harvard does not comment on personnel moves.
Considered by many to be the dean of endowment private
equity chiefs, Dolan reported directly to Jane Mendillo, Harvard
Management Company's chief executive.
Before joining Harvard Management Company, Dolan worked for
Cambridge Associates, a private equity advisory firm, and
Liberty Mutual Insurance Co. He received a B.A. from Harvard in
economics, and an M.B.A. from the University of Virginia.
News of Dolan's departure first appeared on Term Sheet,
Fortune Magazine's private equity blog.
During the 2012 fiscal year, which ended on June 30, private
equity was an underperformer for Harvard, with the asset class
lagging the university's internal benchmark by 205 basis points.
Private equity returned 1.99 percent against its 4.04 percent
benchmark, according to Harvard Management Company's annual
report to trustees.
Private equity, which for Harvard includes venture
investments, was the only one of five asset classes to
underperform its internal benchmark. The underperformance
contributed to the endowment's overall 0.05 percent loss for the
year, and also led Harvard to deliver worse returns than many of
its peer institutions, most of which reported positive returns.
In fiscal 2009, Harvard was badly impacted by the financial
crisis and the value of its endowment fell by 27 percent, or
more than $10 billion, a result also more severe than its
endowment peers. The size of Harvard's endowment has still not
completely bounced back to its pre-crisis levels.
Private equity represented 13 percent of Harvard's portfolio
as of June 2012, and its policy target for the asset class is
set to rise to 16 percent. In its 2012 report to trustees, the
university said it had become more bullish on the asset class.
"In recent years, HMC has been more cautious about
private-equity investments, reflecting ... increased competition
for such assets," said the report. "Now, however, there are
indications that the investment managers see some emerging
opportunities, and are aiming to increase the policy-portfolio
weighting by a couple of percentage points over the next several