Harvard Management Company Chief Executive Officer, Jane Mendillo, shared her investment philosophy on CNBC, during an interactive program which was held on the sidelines of institutional investor meet earlier this week.
Mendillo’s was asked to provide her opinion on the fact that, Harvard Management Company’s allocation in its portfolio to U.S domestic stocks and equities being at a low of about 11% of its total investments, at such a time when the U.S browsers have been experiencing a long drawn out Bull Run.
In response, Mendillo explained that the 11% allocation to U.S public equities, in the current circumstances mirrors its investment pattern in U.S stock for past several years. She then went on to discuss thread bare Harvard Management Company allocation strategy by indicating that they have a similar 11 percent allocation going into European public stock and another good chunk of allocation which goes into the emerging markets. Additionally, a substantive 15 to 20 percent of the investment house equity also gets invested in private equity according to Mendillo.
“We believe in public market equities. […] We participate in markets in a very active way. […] Diversified equity exposure is even more important. We do not believe in having all our eggs in one basket. We have no way of predicting which market is going to do better over a one year, two years or even three years, but over the long-term, all of these equity markets offer the kind of growth potential that we need for the portfolio,” Mendillo said.
A quick review of the portfolio managed by Harvard Management Company attests to the investment tips she shared with her viewers. Her top three portfolio holdings are Beam Suntory Inc. (NYSE: BEAM) of which it holds 1.45 million shares. In Hudson City Bancorp, Inc. (NASDAQ:HCBK) it holds 11.14 million shares and in Forest Laboratories, Inc. (NYSE:FRX) it held 585,604 shares, until the company was acquired by Actavis plc (NYSE:ACT). While Beam Suntory Inc. (NYSE: BEAM) is a premium spirits company, Hudson City Bancorp, Inc. (NASDAQ:HCBK) is a regional bank with market cap of $5.1 billion, where as Forest Laboratories, Inc. (NYSE:FRX) is a New York based pharma firm.
Mendillo then went on to em pathetically assert that “she has no regrets” what so ever in relation to the decisions she has taken in not exposing her investment portfolio to more U.S public stocks. She also confirmed that she would be leaving Harvard Management Company at the end of 2014.