The decision by Harvard to terminate half of its investment staff and outsource funds management bucks the global trend to internalize funds management. The underperformance achieved in the last decade came despite Harvard having all the factors necessary to recruit and retain excellent fund managers. Harvard has a great brand name, patient and substantial capital to invest, and a willingness to recruit and pay for the best talent yet internalization failed. Given this, is internal management the sure thing many make it out to be?
Why Internal Management is So Popular
The primary reason internalization has taken off is that many fund managers are awful. They...
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