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Andrew HeiskellAndrew Heiskell
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Session:         Page of 824

Q:

Harvard had State Street?

Heiskell:

I forget what it did. But finally, in the mid-1970s, they decided that it would be more effective to create our own management firm, financial management firm, while at the same time giving relatively small packets of money to outside firms so as to get their advice, knowhow, etc.

Q:

But one of the end products of having its own captive management firm would be to recoup fees and brokerage commissions and things like that, so that it wouldn't cost so much?

Heiskell:

That would be one advantage, and indeed, it has turned out to be true--we would be spending more on commissions than we spend on the management company, even though we spend a lot of money on the management company, because obviously we have to have the best talent available. And that, in turn, was a problem, because the best talent has to be paid competitively, and being paid competitively is not exactly in the normal framework of a university. So if you got to pay your financial man three times as much as you pay your senior professor, the first thing you do is move the management company to somewhere where it can't be seen [laughter]. Now it's hidden away somewhere in Boston.

[short silence]. The management company had its ups and downs. There was a man--the top person, the chairman of the management company, and but the treasurer of the Corporation, is really the man





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