Harvard Management Company (HMC) has made significant changes to its investment portfolio during the last three months of 2023. According to data released by the U.S. Securities and Exchange Commission, HMC increased its direct holdings in technology giants Alphabet and Meta, while also significantly reducing its exposure to biopharmaceutical companies.
The move saw HMC’s total value of the public portfolio increase by 12.54 percent, reaching a new high of $1.18 billion in assets under management – the highest level for HMC in two years. This increase comes as the S&P 500 continues to hit new records and exceed Wall Street expectations, closing above 5,000 for the first time in the year.
Meta and Alphabet now account for 70 percent of HMC’s public portfolio, with Light & Wonder Inc., a gaming services company, constituting the third largest holding in HMC’s portfolio.
During the last quarter, HMC sold its stake in eight out of nine biopharmaceutical companies, which are counted as part of the healthcare sector. This continued liquidation follows a trend that began in early 2021 when healthcare stocks accounted for 67 percent of HMC’s portfolio at the height of the Covid-19 pandemic. The holdings have now been reduced to less than 1 percent.
The largest biopharmaceutical liquidation occurred about two months before Alan M. Garber ’76 was named interim president of Harvard following Claudine Gay’s surprise resignation. Garber’s relationships with the healthcare industry raised questions about potential conflicts of interest due to his position on HMC’s board of directors.
Not to mention to reducing its biopharmaceutical holdings, HMC increased its technology investments significantly during this period. Technology investments now represent a record 98 percent of the portfolio, up from 53 percent in 2022.
Notably, there was a substantial increase in HMC’s holdings in shares of Meta and Alphabet during this period. With a 34 percent increase in Meta’s holdings and a 56 percent increase in Alphabet’s holdings, their total value jumped to $456 million and $379 million respectively within HMC’s portfolio.
Despite these positive moves, not all investments panned out as expected for HMC. The company sold off its entire position in Grab after purchasing more than 13 million shares since December 2021. Grab was once considered a long-term growth investment but fell short of investor expectations after experiencing a decline in share value by more than half.
HMC retained its direct stakes in semiconductor companies such as NVIDIA, Taiwan Semiconductor Manufacturing Company, and Advanced Micro Devices – together representing approximately 8 percent of the portfolio.
While these changes indicate an In entirety shift towards technology investments within HMC’s public portfolio, it is worth noting that despite being dominated by top-performing U.S. technology companies (referred to as Magnificent Seven stocks), their public market performance continues to lag behind that of S&P 500 – exposing them to low levels risk investments over time.
According to the sourcethese changes demonstrate Harvard Management Company’s strategic approach towards diversifying its investment portfolio amid changing market conditions and industry trends.