Harvard will liquidate investments in two close-end funds run by Templeton, a unit of Franklin Resources, after both sides agreed to drop lawsuits against each other, Templeton announced Thursday.

Harvard Management, which runs the university's $18 billion endowment, is the largest shareholder of the Templeton Dragon Fund and the Templeton China World Fund. Unsatisfied with the funds' performance, Harvard wanted to stop Templeton as investment advisor last year (see MFMN 2/10/03). Templeton sued Harvard this January for alleged violation of security laws. Harvard countersued Templeton for what it claimed was breach of fiduciary duty.

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