Nirmal Narvekar, Harvard’s $57 billion Indian-American money manager, bows out

TOI correspondent from Washington: Nirmal Narvekar, the Indian-American financier who spent nearly a decade reshaping the investment machinery behind Harvard University’s colossal $57 billion endowment, is preparing to retire, closing one of the most consequential – and controversial – chapters in modern university finance.

Known on Wall Street and in Ivy League circles simply as “Narv,” Narvekar reportedly informed Harvard’s governing board that he would step down in 2027 after giving the university time to prepare a succession plan. His departure comes as Harvard’s $57 billion kitty -- the largest university fund in the world, 3.5 times larger than India’s central education budget -- sits at the centre of a political and financial storm triggered by the Trump administration’s cuts to federal funding.

Narvekar’s career drew attention to the extraordinary scale of American university endowments — a concept still relatively underdeveloped in India. Harvard’s $57 billion fund dwarfs the financial resources of most countries’ entire university systems and education budgets. In the US, endowments function as perpetual investment engines. Universities spend only a fraction of annual returns while preserving principal for future generations.

India historically developed a very different model. Most public universities depended overwhelmingly on government funding, while private institutions relied on tuition or philanthropic trusts rather than professionally managed investments. Only recently have institutions such as IIT Mumbai, IIT Delhi and Ashoka University begun seriously cultivating alumni-driven endowments. Even so, Indian endowments remain small by American standards and face restrictive investment rules that limit exposure to venture capital and alternative assets.

Narvekar's rise also reflected a broader ascent of Indians into elite American institutions. At one point, Harvard’s ecosystem featured several Indian-origin leaders, including Harvard Business School dean Nitin Nohria and Harvard College dean Rakesh Khurana. Yale’s endowment itself traces back symbolically to colonial India: the university was named after Elihu Yale, the East India Company governor of Madras who donated goods and money to the fledgling institution in the early 18th century.

Narvekar arrived at Harvard in 2016 after running Columbia University’s endowment and inheriting what many viewed as a troubled investment empire. Harvard’s investment arm had become notorious for internal dysfunction, weak returns and leadership churn after suffering a devastating 27 percent loss during the 2008 financial crisis, forcing it to sell private-equity stakes at distressed prices.

Over the next decade, he transformed the endowment’s structure, moving from managing about 40 per cent of its assets internally to outsourcing roughly 90 per cent to elite hedge funds, venture-capital firms and private-equity managers. He also embraced the so-called “Yale model” pioneered by legendary Yale investor David Swensen, who revolutionized university investing by shifting away from conventional stocks and bonds toward alternative assets like venture capital, hedge funds and real estate.

Under Narvekar, Harvard doubled its exposure to private equity and sharply increased hedge-fund investments, gaining access to coveted investments in companies such as SpaceX and Stripe. The strategy eventually paid off. Harvard generated annualized returns of 8.1 per cent over the past three years, outperforming Yale and Princeton and placing it among the best-performing major university endowments in America, some of which are larger than education budgets of most countries.

Yet Narvekar’s tenure also attracted fierce criticism, especially from conservative commentators and some Harvard insiders who argued he made the university dangerously dependent on illiquid assets such as hedge funds and private equity. Former Treasury Secretary and ex-Harvard president Lawrence Summers once remarked acidly though that if Harvard had merely matched the performance of its Ivy League peers, the university could have been roughly $20 billion richer. While many finance experts consider such critiques exaggerated, they nevertheless reflected broader anxieties about whether elite American universities have become too dependent on opaque Wall Street-style investing.

Narvekar himself remained famously publicity-shy throughout his career. Born into an Indian family and educated at Haverford College before earning an MBA from Wharton School, he built his reputation not as a celebrity investor but as a disciplined institutional allocator.