Paul Kedrosky: A Closer Look at Harvard's Portfolio Changes

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February 12, 2009

A Closer Look at Harvard's Portfolio Changes

There has been lots of chatter about Harvard Management letting go a significant chunk of its staff, as well as winding down much of its equity portfolio, as a filing this week showed. I thought it would be interesting to take a little closer look at what Harvard has done.

From September 30th to today, Harvard has cut the public equity portion (outside of hedge fund holdings, etc.) of its $28.8-billion portfolio from $2.8-billion and 174 positions, to $571-million and 57 positions. That is a remarkable change in such a short period.

Things are equally interesting when you go down to individual holdings. Here is a table of the top ten Harvard positions back in September, and what has happened to them since.

As you can see, while the top September position has stayed the same, there has otherwise been big changes. Four of the top ten Harvard holdings are gone, and two of the other positions have vaulted to prominence from deep in the portfolio.

Now, here is a table of the top ten Harvard positions today versus where they were back in September:

While Harvard dumped many of its top holdings from September, its current top ten positions are all ones it held back in September. Nothing is new. There were, however, some big jumps, with positions increasing significantly in prominence given all the liquidations. More striking is the changed role of ETFs, with five of the top ten September 08 positions having been exchange-traded funds, but nine (!) of its top ten positions being exchanged-traded funds now. With this new fondness for ETFs, is it any surprise that Harvard is shrinking the size of its investing team?

Source: Harvard's 9/30/08 and 12/31/08 13F filings.

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