“I would characterize our Private Equity performance this year as fair. Private Equity (which includes venture capital) returned 11.0% for the year, a strong nominal return, but well below the return on public market equity, and only slightly above our benchmark. When we invest in private equity, we lock up Harvard’s money for multiple years. In exchange for that lock-up we expect to earn returns over time that are in excess of the public markets – an “illiquidity premium.“ Over the last ten years however, our private equity and public equity portfolios have delivered similar returns. While this asset class still presents unique opportunities for attractive returns, it has gotten much more crowded and there is less of an illiquidity premium. As a result, we are actively focused on honing our private equity strategy.”-wrote Jane Mendillo, who is president and CEO of the Harvard Management Company
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