The recent new that Harvard University’s endowment fund is to outsource more of its investment to external asset managers underscores the growing demand for expertise in the low return world.

Harvard is to cut its 230-person staff in half and move away from its decades-long in-house approach to investment strategy. Its $35.7 billion endowment fund has underperformed other Ivy League funds, shining a glaring spotlight on the high salaries and bonuses of its money managers.

Alumni have been often critical of the performance evaluation and incentive structures of managers and especially so over the last ten years when average annual total returns have been 5.7% — the second lowest among Ivy League universities.

The chief executive of Harvard Management, Narv Narvekar, attributes the change in strategy to heightened competition for talent in the industry — something that has made it difficult to attract and retain investment experts.

Harvard serves as a case study highlighting the two factors driving institutional investors to outsource: the need for specialist capabilities and the pressures to achieve better investment returns. Our recent research reveals that demand for expertise and the hunt for higher returns are the top reasons for investment outsourcing.

Outsourcing initially gained traction among smaller institutions lacking the necessary capability to build robust internal investment teams. Today, outsourcing has ballooned beyond that initial scope as the need to produce returns in the new ‘normal’ of low yield has institutions looking elsewhere. Our research shows that one in eight institutional investors who do not currently outsource are considering it in the future.

Most large universities outsource some of their endowment portfolio management. In many ways, Harvard is late to the party. The key decision for institutions is what to outsource and what to keep in-house. How institutional investors divvy up the workload will depend on their investment strategy. Harvard, for example, is keeping its natural resources portfolio in-house.

Others may look to outsource all decision-making or create partnerships where they work alongside outsourced investment experts.  The flexible nature of outsourcing models means institutions can tailor strategies in line with preferences and goals.

Outsourcing gives staff more time to focus on certain areas of portfolio strategy. And it is ultimately undertaken to better serve the end client. The outsourcing dilemma is no longer “Does it work?” but “How will it work for us?”

Tags:

229 Comments

  1. Pingback: viagra 50mg
  2. Pingback: viagra suppliers
  3. Pingback: amoxil
  4. Pingback: sale viagra
  5. Pingback: buy cialis
  6. Pingback: hydroxychloroquin
  7. Pingback: buy Cialis 20 mg
  8. Pingback: lm360.us
  9. Pingback: ceclor uk
  10. Pingback: celexa cost
  11. Pingback: casino game
  12. Pingback: real casino online
  13. Pingback: casino real money
  14. Pingback: payday quick loans
  15. Pingback: payday loans
  16. Pingback: cbd pills sale
  17. Pingback: cbd oil for cancer
  18. Pingback: write an essay
  19. Pingback: paper writer
  20. Pingback: best essay writer
  21. Pingback: cleocin otc
  22. Pingback: where to buy coreg
  23. Pingback: cialis online
  24. Pingback: cheap compazine
  25. Pingback: cheap cozaar
  26. Pingback: crestor coupon
  27. Pingback: macbeth essay help
  28. Pingback: buy research paper
  29. Pingback: thesis proposals
  30. Pingback: ddavp price
  31. Pingback: diamox price
  32. Pingback: differin 15g otc
  33. Pingback: cost of flomax
  34. Pingback: how to buy geodon
  35. Pingback: hyzaar coupon
  36. Pingback: cheap imdur 20 mg
  37. Pingback: daily cialis
  38. Pingback: imitrex online
  39. Pingback: imodium pharmacy
  40. Pingback: Our site
  41. Pingback: cost of viagra
  42. Pingback: imuran generic
  43. Pingback: indocin generic
  44. Pingback: levaquin nz
  45. Pingback: order luvox
  46. Pingback: buy macrobid 50 mg
  47. Pingback: cheap meclizine
  48. Pingback: mestinon 60mg uk
  49. Pingback: mobic nz
  50. Pingback: Femara
  51. Pingback: cheapest motrin
  52. Pingback: canadian meds
  53. Pingback: viagra
  54. Pingback: cost of phenergan
  55. Pingback: cost of plaquenil
  56. Pingback: price of acyclovir
  57. Pingback: prilosec coupon
  58. Pingback: proair inhaler otc
  59. Pingback: cheapest procardia
  60. Pingback: proscar pills
  61. Pingback: protonix coupon
  62. Pingback: provigil tablets
  63. Pingback: pyridium otc
  64. Pingback: how to buy reglan
  65. Pingback: cheap risperdal
  66. Pingback: cost of rogaine
  67. Pingback: seroquel pharmacy
  68. Pingback: singulair 10mg otc
  69. Pingback: tenormin canada
  70. Pingback: toprol price
  71. Pingback: tricor cheap
  72. Pingback: voltaren 50mg uk
  73. Pingback: zithromax purchase
  74. Pingback: buy zovirax
  75. Pingback: zyprexa coupon
  76. Pingback: buy zyvox
  77. Pingback: sildenafil generic
  78. Pingback: cheap escitalopram
  79. Pingback: atomoxetine prices
  80. Pingback: buy anastrozole
  81. Pingback: buspirone tablet
  82. Pingback: order clonidine
  83. Pingback: cephalexin uk

Comments are closed.