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Harvard’s endowment, which is three years into an overhaul, is still trailing rivals.

The $40.9 billion endowment, the biggest in higher education, returned 6.5% in fiscal 2019, Harvard Management Co. reported Friday. Massachusetts Institute of Technology posted the highest number -- 8.8% -- among endowments so far this year. Nine funds that have reported share one thing -- gains are down from 2018.

N.P. Narvekar, who was hired from Columbia University in 2016 to revamp Harvard’s investment office in Boston, has made significant changes. After he joined as chief executive officer, Harvard cut staff by almost half to less than 150 people, shifted almost all its capital to external money managers while shutting down internal trading groups and spinning out a team overseeing direct real estate investments. The endowment returned 10% last year.

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“I am encouraged by the progress our team has made to date, but we are mindful that there is much left to accomplish in the years ahead to resolve legacy issues and position the endowment for long-term success,” Narvekar said in a statement.

Harvard’s hedge fund exposure has doubled under Narvekar while natural resources and real estate have been cut, according to annual financial reports. The endowment didn’t disclose returns by asset class or its latest allocations in a press release Friday.

The returns of larger endowments slid this year partly because their portfolios have been more heavily weighted toward international equities, which suffered losses in the 12 months ending June 30. Endowments with more than $1 billion of assets had 19% allocated to non-U.S. equities in fiscal 2018, versus 13% in domestic stocks, according to an industry study released earlier this year. Alternative strategies like hedge funds and private equity claimed 58% of assets.

Narvekar said after he was hired that it will take five years for the portfolio changes to lift performance. The school’s gain last year ranked next to last in the Ivy League.

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