Harvard endowment has always been affected by the trade-off between the development and capital preservation. In July 1974, the Harvard Management Company (HMC) started its operations, which generated a need to deeply focus this tradeoff through a specific institute. The company started its investment within a decade by investing in a venture capital that caused tension around risk-return tradeoffs. HMC wrestled with various issues, including strategic and short term investment returns, that extent of the portfolio needed for the venture capital and the suitable investment structure – direct investing in entrepreneurial ventures, mature organizations, or outsourcing these operations and just focus on investing in funds. All of the available options matter from the context of students and stakeholders of HMC and these options would amplify the results and obtaining the right balance of the Harvard portfolio.
hmc case
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