Harvard is looking for a new manager for its endowment, the largest of any university. And based on results announced on Thursday, there will be plenty of room for improvement.
The university reported an overall loss of two per cent on its investments for the year ended on June 30, bringing their value to $35.7 billion.
While many endowments have been posting slightly negative returns for the last financial year, Harvard's showing comes after years of poor performance as a series of investment chiefs have come and gone.
For decades, Harvard has embraced a management strategy where a portion of its portfolio was invested by in-house managers and the balance was handed to outsiders.
That approach contrasts strongly with other big university endowments, which have given all their funds to outside managers.
The current vacancy at Harvard arose when Stephen Blyth, who had been promoted internally to head the endowment less than two years ago, resigned in May, citing health reasons.
According to a person briefed on the discussions, candidates to replace Blyth have included N P Narvekar of Columbia University and Amy Falls of Rockefeller University; Narvekar is said to be the favourite.
Narvekar has turned in an impressive performance in recent years as Columbia's endowment has grown to $9.6 billion.
For the decade ended in the financial year 2015, Columbia generated an average annual return of 10.1 per cent, among the best 10-year performances in the country.
Narvekar joined Columbia in 2002 from the University of Pennsylvania's endowment office and had also worked at JPMorgan.
He has no previous ties to Harvard.
Falls, who got her master's degree in public policy at the John F Kennedy School of Government at Harvard, was appointed a year ago to the board of Harvard Management Company, as the endowment is formally known.
At Rockefeller, where Falls took over in 2011 after running the endowment at Phillips Academy Andover, she produced an average annual return of 10.7 per cent through financial year 2015.
That compares with an average of 10.4 per cent for that five-year period for endowments about $1 billion, according to the National Association of College and University Business Officers. But Rockefeller's endowment, at $1.7 billion, is far smaller than those of Harvard and Columbia.
A Harvard spokeswoman, Emily Guadagnoli, said the endowment would not comment on the search.
Narvekar did not return a call seeking comment, and Falls declined to comment.
In any case, "They need somebody tough who is willing to take a fresh look at the Harvard Management Company and the best way to produce strong returns," said Charles Skorina, an executive search consultant for chief investment officers in both the public and private sectors.
Under Blyth, there was significant manager turnover. Harvard announced in June that Michael Ryan, who had been brought in to run the equities desk, was leaving. Andrew Wiltshire, who had long overseen natural resources investments that include timber and land, retired.
Some of the returns announced on Thursday were dismal; Harvard's public equity portfolio declined 10.2 per cent, as did natural resources investments.
Harvard said it would continue managing some of its portfolio internally, but would hand the management of domestic public equities to outside managers. In other asset classes, it said, it will either manage the funds internally or use a hybrid approach.