Malaysia News: Harvard’s endowment backs away from a former student’s hedge fund after an ugly year of losses

Selasa, 6 Jun 2017

Harvard’s endowment backs away from a former student’s hedge fund after an ugly year of losses

Eric Mindich, Founder and CEO of Eton Park Capital Management attends a session at the World Economic Forum (WEF) in Davos January 29, 2010. REUTERS/Christian Hartmann

Thomson Reuters

Eton Park Capital Management Founder and CEO Mindich attends session at WEF in Davos

Harvard’s $35.7 billion endowment withdrew some money from a hedge fund run by one of its former students after an ugly year of losses, Bloomberg’s Michael McDonald reported on Tuesday.

The endowment withdrew from Eton Park Capital Management, the hedge fund run by Eric Mindich that announced it was shutting down in March. Mindich graduated from Harvard in 1988.

“A combination of industry headwinds, a difficult market environment and, importantly, our own disappointing 2016 results” challenged the fund’s sustainability, Mindich said in a letter to investors when the fund shut down. Its launch in 2004 with $3.5 billion was considered one of the largest hedge fund launches ever.

McDonald reported that Harvard’s move came amid an overhaul of the endowment, the largest in higher education.

Harvard’s fiscal 2016 annual report showed that the endowment lost 2% that year, hurt by low interest rates, market volatility, and execution, which was a “key factor.” Mindich’s flagship fund lost 9.4% last year, versus the 12% gain on the S&P 500, partly because of a wrong bet on Japanese stocks, Bloomberg reported.

Head over to Bloomberg for the full story »