Photo Credit: Harvard Alumni
TOI correspondent from Washington: Nirmal Narvekar, the Indian-American financier who for nearly a decade redesigned the investment machinery behind Harvard University’s massive $57 billion endowment, is preparing to retire, closing one of the most consequential — and controversial — chapters in modern university finance.Narvekar, known as “Narv” in Wall Street and Ivy League circles, has reportedly informed Harvard’s governing board that he will step down in 2027 after giving the university time to prepare a succession plan. His departure comes at a time when Harvard’s $57 billion kitty – the world’s largest university fund, 3.5 times larger than India’s central education budget – is at the center of a political and financial storm triggered by federal funding cuts by the Trump administration.Narvekar’s career drew attention to the extraordinary scale of American university endowments – a concept still relatively undeveloped in India. Harvard’s $57 billion endowment dwarfs the financial resources of most countries’ entire university systems and education budgets. In the US, endowments serve as permanent investment engines. Universities spend only a fraction of the annual returns, preserving the principal for future generations.India has historically developed a very different model. Most public universities relied heavily on government funding, while private institutions relied on tuition or philanthropic trusts rather than professionally managed investments. Recently institutions such as IIT Mumbai, IIT Delhi, and Ashoka University have begun to seriously develop alumni-run endowments. Still, Indian endowments are small by US standards and face restrictive investment rules that limit venture capital and exposure to alternative assets.Narvekar’s rise also reflected the broader rise of Indians in elite American institutions. At one time, Harvard’s ecosystem included several Indian-origin leaders, including Nitin Nohria, dean of Harvard Business School, and Rakesh Khurana, dean of Harvard College. Yale’s endowment symbolically dates back to colonial India: the university was named for Elihu Yale, Governor of the East India Company of Madras, who donated goods and money to the fledgling institution in the early 18th century.Narvekar arrived at Harvard in 2016 after running Columbia University’s endowment and inheriting what many saw as a troubled investment empire. Harvard’s investment arm became notorious for internal dysfunction, weak returns and leadership churn after suffering a devastating 27 percent loss during the 2008 financial crisis, forcing it to sell private-equity stakes at distressed prices. Over the next decade, he changed the structure of the endowment, from managing about 40 percent of assets internally to outsourcing about 90 percent to elite hedge funds, venture-capital firms, and private-equity managers. They also adopted the so-called “Yale Model” pioneered by renowned Yale investor David Swensen, who revolutionized university investing by moving away from traditional stocks and bonds toward alternative assets such as venture capital, hedge funds, and real estate.Under Narvekar, Harvard doubled its investment in private equity and rapidly increased hedge-fund investments, gaining access to prestigious investments in companies such as SpaceX and Stripe. Ultimately the strategy was successful. Harvard earned an annual return of 8.1 percent over the past three years, outperforming Yale and Princeton and placing it among the best-performing major universities in the US with endowments, some of which are larger than the education budgets of most countries.Nevertheless, Narvekar’s tenure drew sharp criticism, particularly from conservative commentators and some Harvard insiders who argued that he made the university dangerously dependent on immature assets such as hedge funds and private equity. Former Treasury Secretary and former Harvard president Lawrence Summers once remarked bitterly that if Harvard had matched the performance of its Ivy League peers, the university might have been about $20 billion richer. While many finance experts consider such criticisms exaggerated, they nonetheless reflect broader concerns about whether elite American universities have become too dependent on opaque Wall Street-style investments. Narvekar himself stayed away from publicity throughout his career. Born to an Indian family and educated at Haverford College before earning an MBA from the Wharton School, he made his reputation not as a celebrity investor but as a disciplined institutional allocator.