Harvard Endowment Paid Out a Fortune and Lost Its Investing Edge

Harvard University alumni and business luminaries gathered at the memorial service in Midtown Manhattan. They were there to honor Ron Daniel, a McKinsey & Co. managing partner and Harvard’s treasurer from 1989 to 2004.

Ron Daniel.

Illustration: Christian Blaza for Bloomberg Markets

Daniel, who died at age 93, oversaw astonishing growth of the school’s endowment as chairman of the fund’s board. Under his leadership, the university built up a kind of in-house hedge fund, Harvard Management Co., or HMC. From Boston’s Federal Reserve building, with sweeping views of the harbor, HMC pioneered a strategy of long-term investments in then-exotic fare for endowments such as private equity ...