Jane Mendillo ’80, ’84MBA: stepping down at Harvard

When Jane Mendillo ’80, ’84MBA, became Harvard’s investment chief six years ago, the university’s endowment stood at a record high of nearly $37 billion. Then came the crash.

So when Harvard announced this week that Mendillo will step down as president and CEO of the Harvard Management Company at the end of the year, the university highlighted her “cool leadership during the global financial meltdown,” which cost the endowment more than a quarter of its value.

But there’s more to the Mendillo tenure than weathering a global storm. Inside the HMC teapot, another tempest had been brewing.

“The organization was not stable,” one of her board members says in the official university news release. Mendillo’s counterpart at Stanford University goes further, calling the HMC of 2008 “a place in a good bit of disarray.”

Yale’s top investment manager, David Swensen ’80PhD—who endured a similar plunge in the endowment’s value—adds his praise: “Jane is the real deal,” both “a superb investor” and “a wonderful manager.”

Her accomplishments, Harvard says, include “a stronger emphasis on liquidity, flexibility, and risk management” as well as greater attention to sustainability. The results: “Since the depths of the financial crisis, Harvard’s endowment . . . has averaged 11.3 percent annual returns and grown from $26.1 billion in 2009 to $32.7 billion in 2013.”

“I am incredibly proud of the work we’ve done over the last six years,” Mendillo says in the release. She adds: “As much as I’ve loved this work, and I can’t imagine a better job, there are other things I’ve wanted to do, or do better. I have interests in education and music, and I’d like to get closer to the Boston community.”

Mendillo does not give a reason for her resignation. But the Boston Business Journal opines that the move “shouldn’t be much of a surprise.”

“Mendillo's team badly underperformed the competition in fiscal 2013 and was a laggard among its Ivy League peers dating back to her start at the investment powerhouse in 2008,” the Journal says. “Harvard's endowment also fared poorly relative to many of its private-college peers in Massachusetts.”

Just a few weeks ago, the student-run Harvard Crimson wrote of “frustratingly average” returns and asked: “Has HMC lost its edge?”

In the five years that began with Mendillo’s taking the helm and ended last June, Harvard’s annual returns averaged 1.7 percent, “the worst among the Ivy League,” the New York Times reports. Charles Skorina, a headhunter for chief investment officers who compiled those numbers, tells the Times: “Given the salaries and the resources that Harvard has, you would expect better returns.”

A Harvard spokesman says Mendillo is unavailable for comment.

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The Yale Alumni Magazine is published by Yale Alumni Publications Inc., an alumni-based nonprofit that is not run by Yale University. Its content does not necessarily reflect the views of the university administration.