Harvard University’s endowment managers have hired a new chief risk officer for the $30.7 billion fund, tapping Jake Xia from Wall Street’s Morgan Stanley.
Xia will take a lead role in helping set policies and procedures to analyze and monitor risks in the nation’s largest endowment fund, according to Harvard Management Co., the Boston firm that manages the university’s money.
The goal is not to invest more conservatively, endowment chief Jane Mendillo said, “it’s about optimizing risk and return, and to see where we want to take more risk from time to time.”
Xia (pronounced “Sha”) succeeds Neil Mason, who will return to England for family reasons after July 1, Harvard Management said. Mason joined the group in early 2010, one of Mendillo’s hires as she sought to shore up the operation after the financial crisis. In 2009, Harvard’s famously high-performing endowment lost 27 percent of its value, plunging along with global markets.
Mendillo said risk management has become more sophisticated in the past three years, and will continue to do so.
“It isn’t just about diversification any more,’’ she said. Today, monitoring investment risk entails looking across asset classes, geographic regions, and currencies, “to see how they might be correlated — or not,” Mendillo said.
Xia, 48, holds a PhD in electrical engineering and computer science from the Massachusetts Institute of Technology, a master’s in electrical engineering from Northeastern University, and a bachelor’s degree in electronic physics from Beijing University.
He worked at Morgan Stanley for 17 years. In his last two years at the company, he served as head of Global Structured Rates Trading in New York and managed trading groups across the globe. He previously oversaw trading risks in all fixedincome products, including interest rates, foreign exchange, emerging markets, credit, and real estate securities.
While the complex trading strategies of Wall Street firms have often been blamed for upsetting markets, Mendillo said Xia brings deep experience to Harvard.
“He is a very steady guy and I think he’s going to do a great job managing our portfolio, and the risks in our portfolio,’’ she said.