This seems to be a classic case of the conflicting interests between management and owners. While the Harvard endowment is a long term investment, the funds managers are given an incentive to make money like any other fund manager: a percentage of dividends. This sort of compensation package would not lead a manager who might have a 10 year career with a fund to plan well for an a truly long-term fund. Rather, the manager would be more than happy to take larger risks to maximize the fund's growth for the period that they are present and forsake the very distant future.

It amazes me how often companies and foundations screw up this very obvious and incredibly important point.

CEOs should be getting options for 10 or 20 years from now, not 9 months, etc. etc.