Harvard said to lose $350M in hedge fund

LONDON (CNNMoney.com) -- Harvard has lost about $350 million in the last month through an investment in a hedge fund founded by one the university's former money managers, according to a report published Wednesday.

Harvard has taken a hit after investing in Sowood Capital Management, which was founded by Jeffrey Larson, a former Harvard endowment manager, the Wall Street Journal said.

The $350 million loss is fairly small for the $29 billion endowment, the largest in the country, the newspaper said. But Harvard and several other university endowments have been flocking to riskier investments like hedge funds and private equity in recent years.

Sowood's assets have been halved in the past month to $1.5 billion after running into trouble in the bond market, the Journal said. Citadel Investment Group agreed to buy most of Sowood's portfolio this week.