Bad Investments

Did Larry Summers Lose Harvard’s Cash?

Aggressive strategy resulted in $1.8 billion loss.

Let’s hope he does better with the national economy: The Boston Globe took a look Sunday at the investment strategy of President Obama’s top economic advisor, Larry Summers, when he was president of Harvard. It isn’t pretty: Harvard lost $1.8 billion in basic operating funds when the market crashed in 2008. It was so exposed because of the aggressive strategy pursued by Summers when he presided over the school from 2001 to 2006: He argued to invest 100 percent of Harvard’s cash alongside the endowment and was eventually talked down to 80 percent. The head of Harvard’s endowment, Jack Meyer, “repeatedly warned Summers and other Harvard officials that the school was being too aggressive with billions in cash,” according to the Globe, but he was ignored.