Higher Education

Bill Ackman’s Friend Inside Harvard’s Board

user avatar Author: Editors Desk Source: WSJ:
January 7, 2024 at 12:58

Tracy Palandjian, founder and CEO of Social Finance, was until recently a director at the billionaire’s investment fund.

Billionaire hedge-fund manager Bill Ackman spent months publicly pressuring Harvard to cut ties with its embattled president, Claudine Gay. Meanwhile, a friend of his on Harvard’s governing board was among a small group pushing for change.

Tracy Palandjian is a member of the Harvard Corporation, the insular 12-person group with broad authority to manage the university. Though the group stood by Gay—it accepted her resignation last Tuesday “with sorrow”—Palandjian is one of a handful of its members who had privately questioned whether she could continue as president, people familiar with the matter said. Others who lost faith in her leadership included private-equity executive Paul Finnegan and investor Timothy Barakett.

An alumnus of Harvard’s economics program and its business school, Palandjian, 52 years old, is co-founder and CEO of Social Finance, a nonprofit that raises money from investors for projects meant to reduce government spending. Until last month, she also sat on the board of Pershing Square Holdings, the publicly traded arm of Ackman’s investment firm.

The two met years ago through Harvard’s alumni network. Palandjian launched Social Finance in 2011, modeling it on a similar business her co-founders had built in the U.K. Ackman’s charitable foundation was one of its earliest backers, contributing $1.5 million soon after it launched. His foundation has given millions more in the years since.

After the New York Times reported in late December that Palandjian told a group of academics replacing Gay might not go far enough to get the university back on track, Ackman tweeted a link to the article.

“Now that’s the Tracy Palandjian I know,” he said.
 

 Bill Ackman, CEO of Pershing Square Capital Management. PHOTO: JEENAH MOON/BLOOMBERG NEWS
Bill Ackman, CEO of Pershing Square Capital Management. PHOTO: JEENAH MOON/BLOOMBERG NEWS


Palandjian joined the board of Ackman’s publicly traded investment fund, known for taking stakes in companies including Chipotle and Hilton, in 2021. 

She was added to the Harvard Corporation in April 2022, after serving on the board of overseers—Harvard’s other, larger governing board—from 2012 to 2018. She was also part of the search committees that selected former Harvard President Lawrence Bacow in 2018 and Gay in 2022. 

Ackman, a fellow Harvard alum, made his name as an activist investor before morphing into a social crusader in recent years, mainly through lengthy diatribes posted on his X account. He began zeroing in on Gay’s handling of aantisemitism on campus soon after the Oct. 7 attack on Israel and sent a handful of open letters that became increasingly critical of her leadership when she was accused of plagiarism.

Ackman called Palandjian a handful of times to rant during his quest to get Gay removed. He tweeted in early December one of his “friends” on the Harvard board had ghosted him and the two haven’t spoken about Harvard since early November, people familiar with the matter said.

While it isn’t unusual for members of the corporation to be in contact with other alumni and stakeholders, critics have accused Harvard of appeasing wealthy donors like Ackman.

On Dec. 13, Pershing Square said Palandjian decided to retire from its board, effective Jan. 1, due to increased demands of her work and other board positions, which include the publicly traded asset-management investment firm AMG. Her departure was also to avoid conflicts as Ackman amped up pressure on Gay to resign, people familiar with the matter said.
 

Tracy Palandjian in 2017 at the Boston office of the nonprofit she leads, Social Finance. PHOTO: JIM DAVIS/THE BOSTON GLOBE VIA GETTY IMAGES
Tracy Palandjian in 2017 at the Boston office
of the nonprofit she leads, Social Finance. 
JIM DAVIS/THE BOSTON GLOBE VIA GETTY IMAGES

People who have worked closely with Palandjian say she is an expert networker who is politically adept in the boardroom, soliciting a range of opinions before making her own known.

“She stays in a safe place until she understands where the chips are going to fall,” one of the people said. “She doesn’t want to be on the losing side of any discussion.”

Another person said she tries to hear everyone out to best steer the group.

Palandjian was raised in Hong Kong and came to the U.S. as a teenager.

While an undergraduate at Harvard, she met her future husband, Leon Palandjian, a doctor who worked and invested in life sciences before becoming chief risk officer of his family’s company, Intercontinental Real Estate Corp. His brother Peter, a former professional tennis player who is married to actress Eliza Dushku, is CEO of the $14 billion real-estate conglomerate.

Tracy Palandjian completed a stint at consultant giant McKinsey & Co. before receiving an MBA from Harvard Business School and working at asset manager Wellington Management. She worked for over a decade at the Parthenon Group, a consulting firm that is now part of EY. 

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With the help of two fellow Harvard Business School alumni, she launched Social Finance, which raises money from investors for social programs, aiming to improve efficiency in government spending. If the programs are deemed successful, governments pay the investors back, with a profit. Former Massachusetts Gov. Deval Patrick, now a Harvard professor, is a member of its board.

Some of the firm’s work has focused on education, promoting results-based jobs training. In 2022, Social Finance partnered with a $100 million Google fund to help train students for high-tech jobs.

The Palandjians live in a Boston suburb and spend time at a ski condo in the Park City, Utah, area. They have three grown daughters, all of whom have attended Harvard. 

Rachel Louise Ensign contributed to this article.

Write to Cara Lombardo at cara.lombardo@wsj.com and David Benoit at David.Benoit@wsj.com

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