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After several months of anticipation, Harvard Management Co.’s real estate team has officially spun off to become part of private equity firm Bain Capital.
While Harvard’s real estate returns have been healthy, its endowments have been shrinking, and came in at 8.1% for 2017, behind the national average return of 12.2%. Harvard currently has an endowment fund of $37.1B, The Harvard Crimson reports.
The spinoff will be led by Daniel W. Cummings and will include 22 people from Harvard’s real estate team. It will continue to manage a $3.4B portfolio under the Bain umbrella.
The latest move is part of a strategic restructuring headed by CEO N.P. Narvekar. Last year, Harvard Management laid off half of its staff and spun off its real estate investment team to an external manager.
At the time, Harvekar had said the team responsible for Harvard’s real estate portfolio would be spun off in its entirety by the end of the year. While the spinoff happened about a month later than expected, it has been complete.
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