He's gone.

Mohamed El-Erian's decision to resign as head of the Harvard Management Company gets play all over the major papers (and lots of other places too).

Bloomberg: ``It's a huge loss for Harvard,'' said Ken Rogoff, a Harvard economics professor and former chief economist at the International Monetary Fund, where El-Erian worked 15 years, in an interview. ``He is just incredibly impressive and dynamic and a brilliant person. I'm sure it won't be easy to find a replacement.''

The Times: In a long, if cryptic, statement, Mr. El-Erian said that he was returning to Southern California at the end of the year to be “closer to our family.” His wife and young daughter moved to Boston with him when he joined Harvard. He declined to comment further yesterday.

The Crimson: Benjamin J. Heller ’94, a managing director at the hedge fund HBK Investments who has known El-Erian professionally for a decade, said yesterday that El-Erian’s legacy would be his rebuilding of HMC’s internal management team in the wake of Meyer’s departure.

“Because of his credibility, he was able to get a lot of strong people, and hopefully they’ll stay,” said Heller, who was a Crimson editorial editor.

The Wall Street Journal: The surprise move by Mr. El-Erian comes barely 1½ years after he started at Harvard. The departure leaves the $35 billion university endowment looking for a new leader during a turbulent period in the markets. (A longer article is available to subscribers.)

The Globe: "In returning to Southern California to be closer to our [sic] family, I will miss my daily interactions with this special Harvard community," El-Erian said.

...The laborious executive search that finally landed El-Erian showed how difficult it could be to find a new executive to run the university's endowment. Harvard had offered the job to Bain Capital executive Mark Nunnelly in the summer of 2005, but he eventually declined.

Portfolio.com:

• • This has got to be a serious blow to Harvard, where his work of rebuilding the management team in the wake of Jack Meyer's departure is only, by his own admission, part done. ("HMC is still in a transition phase," he wrote in his John Harvard letter three weeks ago.)
  • Given that El-Erian was clearly making a long-term commitment when he moved to Boston, does this prove that that Harvard is genuinely bad at retaining talent?
  • Or is El-Erian just fickle? His tenure at Harvard was short, but not as short as his tenure at Salomon Smith Barney.... (Blogger: The rest of this is quite interesting.)

My take: Of all the appointments Drew Faust has had to make, this one will probably be the most closely watched, and either the most important or the second-most, after the FAS deanship. So...probably the most important. She's going to get a lot of advice on a subject that is way, way beyond her experience. Can she trust it? Will she know enough to make an informed judgment? Or will the Corporation handle this for her?

Replacing El-Erian is Drew Faust's first big test.