The Harvard Management Company added three biopharmaceutical companies — including a firm developing a coronavirus vaccine candidate — to its investment portfolio in the second quarter as the overall value of their public securities holdings dropped 28 percent.
HMC's losses and acquisitions in the second quarter — which ran from April 1 through June 30 — were revealed as part of its latest filings with the Securities and Exchange Commission. Investment managers who oversee more than $100 million are required to disclose public securities holdings each quarter.
The decline in the value of HMC’s public securities follows a 32 percent drop in the first quarter of 2020.
John M. Longo, a professor at Rutgers Business School and the Chief Investment Officer for Beacon Trust, wrote that the drop in value this quarter is not necessarily indicative of the endowment’s poor performance.
“What's most probable is that the management team decided to reallocate equities to other investment areas, such as alternative investments,” Longo wrote in an emailed statement.
“Most equity markets around the world rallied strongly in Q2, so it is highly unlikely a diversified portfolio of equities fell 28% in value without changes to the asset allocation,” he added.
All three of the new additions to the portfolio this quarter are biopharmaceutical companies: BioNTech, Generation Bio, and Pliant Therapeutics.
BioNTech is currently working with Pfizer to create a vaccine for COVID-19. The companies secured a $1.95 billion order for the vaccine from the U.S Departments of Health and Human Services and Defense in July.
Harvard bought around 30,000 shares of BioNTech stock, in addition to 500,000 shares each of Generation Bio and Pliant Therapeutics. Both companies had their initial public offerings in the second quarter.
HMC sold all of its shares in two other companies — the biopharmaceutical firm NuCana Plc and the software company Ping Identity Holding Corp., which it had just bought last quarter.
HMC also adjusted some of its investments in other prominent tech companies in the second quarter. It grew its shares in Uber Technologies Inc. for the third quarter in a row, this time from 2.8 million to 3.11 million. It also doubled its shares of Alphabet Inc., the parent company of Google, from 28,000 to 63,000.
HMC significantly reduced its shares in Facebook, from almost 1.3 million to just 170,000, and Palo Alto Networks Inc., from nearly 1.18 million to 342,000.
The changes remain consistent with HMC’s previous investment patterns. All of the public companies HMC currently invests in are either technology companies or biopharmaceutical companies. HMC also invests in index funds, exchange traded funds, and gold.
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