Jane L. Mendillo, the manager of Harvard’s $32.7 billion endowment, plans to step down by the end of the year, the university said on Tuesday.
Ms. Mendillo, 55, who in 2008 became president and chief executive of the Harvard Management Company, which oversees the endowment, was charged with repairing the university’s portfolio after the financial crisis. But the performance of the endowment has fallen short of the returns of other Ivy League endowments.
With investments in a range of sectors, including private equity, hedge funds and real estate, the Harvard endowment is the nation’s largest and thus wields considerable influence on Wall Street. Big university endowments, and Yale’s in particular, are often seen as a model for other investment managers.
Universities use their endowments to finance a range of activities, from scholarships to building projects. Harvard has promised to use its financial resources to make sure that anyone can afford to attend.
Harvard did not give a reason for Ms. Mendillo’s departure. In an interview, Ms. Mendillo, a former chief investment officer of Wellesley College who spent an earlier 15-year period at the Harvard Management Company, said she felt the time was right to move on.
“We’ve made a great recovery from the financial crisis, we’ve repositioned the portfolio and we’ve built a great team,” she said.
But the endowment faced challenges after the financial crisis, when declines in private equity and other illiquid investments wounded its portfolio. Over the five-year period ending June 30 of last year, the Harvard endowment had an annualized return of 1.7 percent, the worst among the Ivy League, according to data compiled by Charles A. Skorina, the founder of an executive search firm that specializes in hiring chief investment officers.
The endowment’s assets, as of June 30, 2013, were more than $2 billion below the $34.9 billion level seen before Ms. Mendillo took over. In part, that decline reflected the $11 billion that the endowment has distributed to the university during the five years ending this month.
“Given the salaries and the resources that Harvard has, you would expect better returns,” Mr. Skorina said.
Ms. Mendillo pointed out that the portfolio lost 27 percent during the 2008 to 2009 fiscal year, which was “a reflection of the portfolio that I inherited when I walked in and not any investment decisions that I was able to make when the markets started their tumble.”
Ms. Mendillo’s appointment in 2008 ended a difficult period for the endowment, which had been overseen for almost two years by Mohamed A. El-Erian. He subsequently returned to the giant asset manager Pimco, serving as chief executive until this year.
A graduate of Yale, Ms. Mendillo worked in the Yale investments office after college before attending the university’s business school. She then worked at Bain & Company before joining the Harvard Management Company in 1987.