(Adds comments from Mendillo)
By Svea Herbst-Bayliss
BOSTON, June 10 Jane Mendillo, the first woman
to run Harvard University's investment arm, will leave at the
end of 2014 after guiding the Ivy League school's $32.7 billion
endowment through the financial crisis and its aftermath, she
said on Tuesday.
Mendillo, 55, took the reins at the wealthiest university's
investment arm six years ago. She said she is leaving to spend
more time with family and friends and pursue personal interests
She took up her position as president and chief executive
officer of Harvard Management Co, one of the most closely
watched jobs in the investment management business, just as
financial markets began to plunge in July 2008. She was forced
to aggressively overhaul the endowment by paring some of its
riskier and less liquid investments during her first months on
the job, which included Lehman Brothers' bankruptcy filing on
her birthday in September 2008. The endowment lost $10 billion -
or 27.3 percent - during her first year.
Now she leaves the endowment in what she calls a "good
spot." The endowment's performance, which had long been the envy
of the investment world, has rebounded. The university has
reported average annual returns between 11 percent and 12
percent for the last five years.
"We have had a great recovery from the financial crisis,"
Mendillo said in a telephone interview, adding, "We have rebuilt
the team with incredible talent, and we've rebuilt the
The university said it has already begun seeking Mendillo's
Mendillo said she has been thinking about leaving the
position for some time but will give it "100 percent, just as
the job requires," until she leaves at the end of the year.
"Jane has been an excellent leader for HMC and a true
partner for the University. She 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,"
Harvard University President Drew Faust said in a statement.
Mendillo replaced Mohamed El-Erian, who left after only two
years as CEO of Harvard Management Co to return to Pacific
Investment Management Co. At PIMCO, he was groomed as the heir
apparent to Bill Gross to run the world's biggest bond fund
until his surprising resignation in January. Before El-Erian,
Jack Meyer ran Harvard's endowment for 15 years and helped it
grow nearly five times to $22.6 billion.
Mendillo, who earned her undergraduate and MBA degrees from
Yale, will be 56 when she steps down. She said she is not
looking for another full-time position in the investment
Unlike many universities, Harvard manages much of its money
in house, something that is unusual for big endowments and
universities. It also employs hedge fund managers, some of whom
once worked for Harvard, to invest some money. During Mendillo's
tenure, that portion was decreased. Harvard now manages roughly
42 percent of the money internally, up from roughly 30 percent,
a move that saves the university money and gives it better
control over the assets.
Mendillo's more cautious investing approach may have
dovetailed better with the university's needs. Harvard depends
on the endowment for roughly one-third of its annual operating
Harvard announced last year that it wants to raise $6.5
billion in a capital campaign. Earlier this year, hedge fund
manager Kenneth Griffin pledged a record $150 million gift in
honor of his 25th reunion.
(Reporting by Svea Herbst-Bayliss; Editing by David Gregorio,
Richard Valdmanis and Jan Paschal)