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The value of Harvard Management Company’s direct public investments increased by 18 percent during the first quarter of 2023 as key tech stocks in its portfolio rallied.
HMC, responsible for managing Harvard’s $50.9 billion endowment, saw the value of its direct stock holdings rise to nearly $952 million in the first quarter of 2023 — which ended March 31 — up from $806 million at the end of 2022.
The increase was primarily due to significant gains in HMC’s tech investments, including Meta Platforms — formerly known as Facebook — which saw its stock price rise by more than 76 percent in the first three months of 2023.
John M. Longo, a professor at Rutgers Business School and chief investment officer at Beacon Trust, wrote in an email that the growth in HMC’s direct stock holdings mirrors the performance of other investment portfolios during the first quarter.
“The S&P 500 increased 7.5% in Q1, so most diversified equity portfolios rose over the reporting period,” Longo wrote.
As of December 2022, HMC’s holdings in Meta totaled $136 million, representing more than 16 percent of its stock portfolio. By the end of the first quarter in 2023, the company’s Meta stocks were worth more than $240 million — more than a quarter of the value of HMC’s direct public investments.
Longo also wrote in an email that Meta’s stock “has been one of the best performers YTD in 2023.”
“The firm has embraced cost-cutting as well as growth in AI, while seeming to scale back its investments a bit in the metaverse,” Longo said. “Investors seem to like this shift in strategy.”
Other tech stocks held by HMC also rallied. In the first quarter of 2023, HMC’s NVIDIA holdings rose in value from $9.6 million to $18.4 million, an increase of 91 percent. The company’s investments in Alphabet, the parent company of Google, grew from $212 million to $250 million, an 18 percent increase.
Consistent with previous quarters, HMC’s tech stocks comprised the largest share of its direct public holdings, with Alphabet maintaining the top spot from the previous quarter. Following its rally in the first quarter, Meta moved up to HMC’s second-largest position — a spot held by Scientific Games in the previous quarter.
HMC also drastically cut its investments in the California-based biotechnology companies Revolution Medicines and Pliant Therapeutics during the first quarter, slashing its positions by 53 percent and 50 percent, respectively. Pliant Therapeutics has experienced steady declines in recent months, while Revolution Medicines has been recovering from a steep decline earlier this year.
Additionally, HMC invested in UiPath, Pardes Biosciences, and El Pollo Loco in the Q1 of 2023, representing a wide diversity of industries from software to food and beverage. Collectively, these new investments represented just over 0.1 percent of HMC’s total stock holdings at the end of the first quarter.
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