Harvard finances in bad shape
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Anonymous
Alternative investments are not marked to market… |
Anonymous
| Poor, poor Harvard. Cry me a river. |
Anonymous
Not a huge fan of Harvard, but we will all be worse off when our universities go down, which seems to be what our government intends to do. And it's not just universities - Harvard includes a hospital system with a huge research enterprise that we all benefit from. |
Anonymous
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Well you can thank Bill Ackman and his ilk for destroying Harvard and our entire higher education system.
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Anonymous
It is ridiculous that an endowment should invest 75% in private equity and VC. You would think that they should be forced to ensure stability with only a small portion with higher risk. Just shows that they don't actually have great minds. The minds there are mainly living off reflected glory. It also could mean there is a greater rot in there that is being hidden and these private high risk high return investments are a hail mary to recover from deeper losses. |
Anonymous
Precisely. |
Anonymous
Thanks for sharing. The managers have been incompetent and negligent. Harvard has $124 billion in unpaid capital commitments, an amount the university has pledged but not yet paid to private equity and other illiquid investment funds as of June 30, 2024. These commitments represent future obligations-Harvard must provide this capital when called upon by the investment managers, which creates significant liquidity risk. |
Anonymous
| Glad the government is pulling the plug on Harvard. They have proven themselves irresponsible and cavalier in managing taxpayer and donor money. And for those who will cry "what about cancer", Harvard going down will change nothing, medical research will be just fine without Harvard. |
Anonymous
It’s not 75% in private equity and VC though. It’s 39% in private equity. There are some other things that are less liquid than pure public equities (hedge funds 32%, real estate 5%, other real assets 3%), but all of these can be exited with a bit of time and they are generally uncorrelated with each other. Most of the claims on this thread of mismanagement or huge capital commitments are unfounded. They are exiting private equity for the same reason everyone is — the outperformance has shrunk and the war on universities means they may need access to funds sooner than planned. Harvard’s endowment distribution as a share of the university’s operating budget has nearly doubled in the past 20 years to almost 40% of the budget. |
Anonymous
And here is Yale’s, which is hardly the panic and mismanagement people here are making it out to be: ——— The fund contributes more than a third to Yale’s annual operating budget, last year providing $2 billion. But with the markets for initial public offerings and mergers softening, private equity firms’ distributions as a percentage of net asset value have fallen to 11% from an average of 29% between 2014 to 2017 while global buyout assets have tripled, according to consulting firm Bain & Co. On its earnings call last week, Blackstone Inc. warned that policy-driven uncertainty and market volatility would only worsen this exit drought. This tension between long-term strategy and near-term needs poses a delicate balance. In October 2023, Swensen’s successor as Yale’s chief investment officer, Matt Mendelsohn, affirmed the endowment’s commitment to illiquid investments, noting that its “ability to be patient with long-term, illiquid assets will continue to be one of Yale’s key competitive advantages.” While the strategy has worked well to date – the endowment returned 10.3% per year during the 20 years ending June 30, 2024 – market conditions are shifting. As Mendelsohn noted, “success over the next four decades will look different than success over the last four” – and the allure of private equity may be fading. Bain & Co. noted that while buyout funds still outperform public markets over longer periods, that edge is eroding. With competition keeping acquisition prices high and debt costs elevated, generating alpha has become increasingly difficult. Dumping $6 billion of private equity would be a seismic move. Last year, endowments and foundations combined sold just under $9 billion in the secondary market, according to Yale’s adviser, Evercore Inc. And Yale would have to take a hit: In 2024, the average discount for buyout portfolios was 10% to net asset value, although some recent transactions were done narrower. But if the sale is completed, it could prove prescient in the event of continued market deterioration. In early 2009, Swensen identified “extraordinary opportunities” in distressed credit. If Mendelsohn can stomach the discount now, freeing up billions in dry powder could position Yale to capitalize on similar opportunities ahead. https://www.bloomberg.com/opinion/articles/2025-04-23/yale-s-endowment-have-we-reached-peak-private-equity |
Anonymous
| How much of a discount did Yale have to sell for? |
Anonymous
Krasnov has his reasons. |
Anonymous
This is an uneducated, grossly ignorant take. What is your vision for the higher ed institutions? What is your vision for addressing the brain drain that will occur if our great institutions fail? |
Anonymous
This link shows Harvard with a 39% allocation in private equity, which a little more than half of what Ackman said it is. Furthermore, endowments are usually just reported publicly once a year. All of the institutions would have fluctuations from the last reported amount, not just those with private equity. |
Anonymous
| Ackman is a complete idiot who inherited his money and managed to not to blow it all like Trump. His attempt to take his company public this summer went hilariously off track this summer. Worth reading about before touting anything he says. |