Harvard Loses Top Bond Managers By Shrinking From Distressed Debt

harvard tbi

Marc Seidner and Michael Llodra are leaving Harvard Management Co, the company that manages the notion’s largest endowment. Seidner is the head of domestic bond investing and was the second highest paid person at the HMC last year, taking home $6.3 million.

The issue seems to be that investing for Harvard is just becoming a bit too boring.

Here’s the WSJ’s report:

At Harvard, Messrs. Seidner and Llodra have helped deliver strong returns and had wanted to take advantage of a recent upswing in distressed credit markets, according to a person familiar with the matter.

Investors who bought junk bonds or leveraged loans at the start of this year have captured returns of 28% or more. Some of the assets worst-hit in the credit crisis, like commercial and residential mortgage-backed securities, have retraced their worst declines amid massive government stimulus programs.

Harvard has lately been favouring safer, more-liquid securities in its domestic bond portfolio, said a person familiar with its strategy. But it isn’t turning away from all fixed income or other higher-risk situations. Harvard Management has hired Michele Toscani of Fortress Investment Group in Tokyo to start in September as a international fixed-income investor with a specialty in Asian credits.

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