Fair Harvard, from Victor Niederhoffer
For an eternity Harvard has paid its fund managers 100 times as much as the average professor. The overseers seem too foolish to understand that when you have funds already raised, the performance fee should be 1/20 of what it is. The managers are able to fool the professors by saying that if you went outside, the cost would be much higher, and we only get paid much if we beat the bogey. The regression fallacy seems unknown to the professors, i.e. that some will beat it by luck, and they will absorb the bad and pay for the good, and the whole fund raising apparatus which is Harvard's main asset does not take a cut from the manager's pay.
Comments
Anonymous on April 14, 2016 7:23 pm
a good way to save Harvard 50 million a year would be to put all of their 37 billion + hedge fund in vanguard or fideelity index funds victor niederhoffer
admin on April 15, 2016 4:44 am
of course these payments appear to be 1/3 of what they were under the previous fund manager. when the endowment was about 1/3 smaller. the beauty of it is that it slips by the professors who must watch each othr's salary like a fox watches sheep. Of course there mite be some
other factors that I am not considering and the University spokesman
apparently likes to compare the salaries to what other mutual fund
management companies pay out in total .