It's no college prank, but Harvard University wishes it were.
Officials at the Ivy League school said Wednesday that the university's endowment, the largest in the nation, lost 22% of its value since July 1. That tallies up to about $8 billion. ... Ouch!
On June 30, the end of its fiscal year, Harvard's endowment was worth
$36.9 billion, but has since been ravaged by write-downs across the
board as the stock and bond markets plummeted.
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The school is expecting a
30% loss for the year, but it could be even greater than that as
valuations for the fund's real estate and private equity holdings have
yet to be updated.
Unable to call home and ask mom for
more cash, Harvard is "reconsidering
the scale and pace of planned capital projects, including the university's development in Allston, and are taking a hard look at
hiring, staffing levels and compensation to consider how we can reduce
overall spending."
Harvard is also busy divesting its stakes in private equity funds. In
early November it came out that the school was looking for a buyer for
its $1.5 billion of investments with Bain Capital LLC. -
George White
See Harvard letter on endowment
See Dealscape post on Harvard sale of investment
Comments
Sorry to say that Harvard should have setup a student loan program for it own students based on government backed programs. The returns are low, but it is a safe investment. A university investing in students? What an interesting concept based on the fact that most universities are crying about student loan issues for last 24 months!