Can Harvard’s New Endowment Chief Pull Off a Turnaround?

Narv Narvekar is the underperforming Ivy endowment’s fourth CEO in 11 years — and a hire the board knew it had to get right.

The world’s largest — and most watched — endowment turned to its peers for a new CEO to break a decade-long run of low returns, high turnover and strategic upheaval.

Harvard University believes it has found that leader. The school announced late last week that it has hired Nirmal (Narv) Narvekar, CEO of Columbia University’s endowment since 2002, to run Harvard Management Co., which manages its $36 billion endowment fund. Industry insiders say Narvekar is a safe choice for an organization that knows it’s well past time to make the right one.

The Stakes

“They’ve had a lot of turnover and taken a lot of heat for not keeping up with their Ivy League brethren,” says Nolan Bean, managing principal of investment consulting firm Fund Evaluation Group. Bean, who does not work with HMC, has watched HMC work through several leadership changes. “You don’t want a lot of turnover in that top job: Harvard is the ultimate long-term pool of capital. And it’s disruptive.”

At 54, Narvekar offers both experience and potentially decades of sustained leadership for HMC, Bean suggests. “If he clicks well, he could do it for a while.”

Narvekar’s predecessor, Stephen Blyth, lasted 16 months as CEO. He resigned in July for undisclosed “personal reasons” after two months of medical leave. Blyth has continued to teach senior-level statistics courses at Harvard since stepping down.


HMC’s returns for FY2016 — Blyth’s only full year as endowment chief — followed a familiar pattern of underperformance. The fund lost 2 percent for the year ending June 30, 64 basis points below the median -1.36 percent return among $1 billion-plus peers in investment consultancy Callan Associates’ database.

“Clearly, these are disappointing results,” HMC board chairman Paul Finnegan said in announcing the performance. “We are all focused on taking the steps necessary to ensure HMC can continue to most effectively support the mission of Harvard University over the long term.”

Finnegan was days away from revealing the board’s biggest step: hiring a new CEO.

The Candidate

Blyth’s July 27 resignation took effect immediately. HMC’s board retained recruitment firm David Barrett Partners, which had recently placed new investment leaders at Stanford’s endowment (Robert Wallace), the American Red Cross (Greg Williamson) and the University of California (Jagdeep Bachher).

“There was a high level of interest, and a competitive process, as HMC had a lot of interesting choices,” firm founder David Barrett tells Institutional Investor. “What made the search difficult was the bar set by the board: We were really shooting high.”

For one thing, investors who have experience at endowments of Harvard’s scale almost don’t exist outside of the fund. “Harvard is 50 percent bigger than the next largest,” Barrett points out. Adding a strong track record and good people skills to the list of requirements shrank the pool of potential candiates to a puddle.

But the board proved flexible on one criterion that’s often ironclad for elite endowment leaders: their alma mater. Narvekar earned a B.A. in Economics from Haverford College, a small liberal arts school in Haverford, Pennsylvania, and holds an MBA from The Wharton School at the University of Pennsylvania.

“Narv is not a Harvard man, but he’s also not a surprise,” says Robert Grady, a private equity investor with San Francisco–based Gryphon Investors, former chair of the New Jersey State Investment Council, and Harvard alumnus. “I understand that they were very focused in the search on someone from a smaller endowment.”

At $9 billion, Columbia’s fund has one-quarter of Harvard’s asset value — but a much better track record. Narvekar led the New York City–based Ivy League fund to an annualized return of 10.1 percent over the decade ending June 30, 2015. (Columbia has yet to report for 2016.) HMC gained 7.6 percent for the same ten years, a spread of 250 basis points in Narvekar’s favor.

Barrett may have delivered Narvekar into the endowment world’s crown seat, but Russell Reynolds recruiters spotted him first. Asset management specialist Deb Brown helped place Narvekar at Columbia in 2002 — “ancient history!” in her words — and remains a fan of the asset owner.

“Narv is an outstanding investor,” Brown says, “who unusually distinguished himself early, with a combination of direct investment experience on the Street as well as being an allocator. That’s not unique, but it is unusual. Overall, he’s terrific.”

The Haverford College alum spent 14 years at JPMorgan (1984 to 1998), before exiting his managing director role for the University of Pennsylvania’s investment office. Narvekar rose quickly at his alma mater from MD to deputy director. When Narvekar was four years into his asset-owner career, Brown and her team came knocking with the Columbia opening.

Columbia University president Lee Bollinger credits Narvekar with driving the “remarkably consistent success of our endowment investment managers year after year.” During his tenure, the endowment more than doubled in value from $3.4 billion to $9.6 billion.

Columbia has made the rare decision to name endowment CIO Peter Holland as Narvekar’s successor without first conducting a formal search. This move, according to Brown, “speaks to Narv’s ability to attract, retain and promote talent from within. If you’re looking for someone who’s a talent magnet and has been able to give the board confidence, he’s that person.”

The Challenges Ahead

Industry insiders polled by IIN agree that Narvekar is a strong choice for an extremely difficult position.

HMC and its U.S. peers draw scrutiny worldwide, according to the former CIO of a major UK pension fund. “The big U.S. foundations and endowments do a lot of things that are very different to other investors, which can put huge pressure on the person at the top,” the investor says. Major European institutions often alleviate such attention by refusing to engage with media, whereas “U.S. institutions are much more ‘out there,’” the investor adds.

The notoriously press-shy Narvekar might fit in well on the Continent. He hasn’t given an interview for years, as any investment reporter knows all too well. Keeping quiet about his work at HMC may lessen pressure on the margin, but insiders say a merciless spotlight comes with the job. The annual Ivy League endowment performance horserace fascinates industry watchers at large, but perhaps no one watches as closely as the participants themselves.

“The tension is balancing that long-term responsibility with the fact that the large endowments tend to measure themselves against each other,” says Gryphon’s Grady. “If you’re radically different and wrong, it’s not like you’ll have five or ten or 15 years to prove you’re right. It’s highly competitive.”

Barrett says his latest placement will need time to revamp the endowment’s performance. “No one will really know how good Narv is for another decade. But unless you get to the point that you have a track record like David Swensen’s at Yale, the pressure is on,” Barrett adds. “These portfolios are like ocean liners: it takes more than a year to turn them. For Narv, the three-year return number will be the most important one.”

One thing is certain: As he embarks on what may be the biggest challenge of his career, Narvekar can count on plenty of free advice from observers about how to run the world’s largest endowment.

“It’s like being the manager of the Yankees,” says Bean. “It sounds good, but you’re being yelled at by everybody.”

Additional reporting by Matthew Craig, European Content Director, Investor Intelligence Network.