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
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
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)