Harvard Management Company

Risk Management

Monitoring Complex Investment Risks

A critical component to portfolio management

Managing Opportunities and Risk - Deep expertise built on decades of experience

Risk management is a critical component of successful portfolio management. At HMC, we integrate risk management into the fabric of our investment strategy to protect the assets that we manage for Harvard University. The management team and the HMC Board devote substantial staff, time, and attention to managing the complexities that relate to the risks inherent in our portfolio.

Multiple forms of risk exist in any sophisticated investment strategy, including market, leverage, counterparty, and illiquidity. HMC continually reviews and revises the analytical functions by which we measure and control risk in the portfolio. Continuous improvement in risk management is critical in what remains an extremely volatile environment.

The risk tolerance of the University is a key component in our portfolio construction. HMC works closely with the University to understand appropriate risk parameters and align the endowment's risk/return profile with the University's goals and needs.

Jake Xia
"Strong, sophisticated risk management systems enable HMC to effectively analyze and monitor investment risks and to optimize the risk/return profile of the overall Harvard endowment. We believe our risk processes and tools must continually evolve to meet the demands of Harvard’s globally diverse portfolio." Jake Xia
Chief Risk Officer