Amid all the headlines last month about Jack Meyer‘s stepping down as CEO of Harvard Management Co. in June to start his own investment firm, one question hasn’t been answered: Will Meyer, who pioneered Harvard University’s innovative approach to endowment management by essentially turning HMC into an in-house hedge fund, still run money for the school as an outsider?
Neither Meyer nor Harvard will say, though many in the investment community assume he will. After all, several former HMC managers have started hedge funds with university money. But with Meyer’s track record -- he posted a 16 percent average annual return over the past decade and roughly quintupled the fund’s assets in 15 years -- he won’t need the school’s money to get his venture going. And given the heat he’s taken from Harvard alumni over HMC compensation, he may not want to.
“Everything Harvard does is scrutinized, right down to the last basis point, and then we had to deal with the annual compensation thorn,” says Meyer, 59, whose awarding of tens of millions in performance bonuses to HMC managers drew particular criticism. “It would be disingenuous of me not to confess that, yes, it would be nice to retreat a little bit from that spotlight.”
Some of Meyer’s former HMC colleagues aren’t surprised he’s leaving. “Jack has been the one on the front lines for a long time,” says Jeff Larson, who founded hedge fund Sowood Capital last summer with $700 million from HMC. “I was fortunate that he was the one who responded and dealt with controversy.”
Meyer’s exit may also mark the end of HMC’s unique structure. “The success of the model was partly related to the model itself and partly related to the people,” says Michael Eisenson, who left HMC to co-found Charlesbank Capital Partners in 1998. “Jack is a quintessential investment management firm CEO and perhaps the best such CEO in the business today.”
