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From the WSJ:

Harvard University's endowment fund has graduated some of the most sought-after money managers in the hedge-fund world.

Now one of those stars is teaching Harvard a lesson of its own.

In the past month, the university lost about $350 million through an investment in Sowood Capital Management, a hedge-fund firm founded by Jeffrey Larson. Mr. Larson managed Harvard's foreign-stock holdings until 2004, when he left to set up Sowood, which recently lost more than 50% of its value amid bad bond investments.

Mr. Larson isn't the only high-profile former Harvard-endowment manager with a mixed record since leaving the ivory tower. Jack Meyer, Harvard's former top investment manager, last year raised a $6 billion hedge fund, Convexity Capital, including an initial $500 million investment from Harvard. While Convexity's returns were subpar early on, its performance has improved lately, according to people familiar with the figures.

(Via Joe DealBreaker)

Posted by edelfenbein at August 1, 2007 10:59 AM