Harvard lost a big chunk of money on derivatives last year
By Daniel at 23 August, 2009, 9:02 pm
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Harvard’s Mendillo Increases Cash, Sees Diminished Fund Returns
By Gillian Wee
Aug. 23 (Bloomberg) — Harvard University’s chief executive officer for endowments, Jane Mendillo, is breaking with past strategy and setting aside cash to increase investment options, as the wealthiest U.S. school prepares for a decline in returns.
“I’d like us to be strategic investors and I’d like us to be able to respond to whatever needs the university might have,” Mendillo, who took over the fund in July 2008, said in an interview in her Boston office. “Based on those two things, being able to access some small pocket of cash is important.”
Harvard is seeking to avoid a repeat of last year’s cash squeeze, caused by losses on derivatives used to protect the university against rising interest rates. With the value of endowment assets tumbling along with financial markets, the school sold $2.5 billion of bonds in December, cut jobs and postponed building projects.
http://www.bloomberg.com/apps/news?pid=20601087&sid=ab2Oee1IbMtg
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