Harvard University’s endowment fund reported a stellar 23% return for the fiscal year ending in June, boosting the size of the nation's largest college endowment to a new high of $34.9 billion.
The return outpaced the Dow, which gained 20% during the period; the S&P, which rose 18%; and Nasdaq, which rose 20%.
The fund, which is now run by Mohamed El-Erian, turned in the strong performance even though it reported losing $350 billion, or 1% of its total assets, last month through an investment with Sowood Capital Management. The Boston-based hedge fund saw its assets cut by more than half last month after it made several bad bets in the bond market.
Despite the losses from Sowood, the Harvard endowment still managed to be up 0.4% in July. In that same time period, the S&P fell by more than 3%.
This is El-Erian's first year running the fund. El-Erian, who previously ran Pimco’s emerging markets fund, took over management of the fund from Jack Meyer, who now leads Convexity Capital hedge fund. Meyer had annualized returns of 21% over the 15 years that he ran the endowment.