A snippet from today’s FT on the escalating war of words between Yale’s David Swensen and Harvard endowment. It shows the essential dilemma facing universities with billion-dollar funds, Swensen’s solution to which (accepting dramatically non-market compensation) won’t be everyone’s cup o’ financial tea:
Jack Meyer, who managed the Harvard money, famously left in something of a huff last year after some alumni took exception to his outsize pay packet (he’s running his own hedge fund now, with Harvard as a big client).
Meanwhile, David Swensen, who heads the Yale fund, continued to toil away in relative penury and a few weeks ago took a swipe at Harvard’s largesse. According to Foundation and Endowment Money Management, he recently told a forum: “You canâ€™t pay managers astronomical amounts of money because it tears at the fabric of the university.”
“I have long said that the structure of Harvard Management is inherently unstable,” said Swensen, who is paid about $1m a year, compared with the $60m to $100m that Harvard’s six best-paid managers collectively earned each year for the past few years.