Harvard Endowment Hurt By PE, Real Estate Investments

Sep 11 2009 | 1:28pm ET

Not even the crimson elite are immune from market upheaval. Harvard University’s endowment, which is heavily invested in private equity, hedge funds and other alternative investments, dropped 27.3% during the fiscal year ending June 30, but despite the decline, the universtory’s long-term performance remains solid.

The 5-year annualized return was 6.2, and the 10-year annualized return was 8.9%, with the overall value of Harvard’s endowment now standing at $26 billion.

“During the 2009 fiscal year we saw extreme volatility and financial dysfunction impacting markets around the world as well as the Harvard portfolio,” Harvard Management Company President and CEO Jane Mendillo told the Harvard Gazette. 

“HMC actively managed the endowment through truly unprecedented conditions over the past year while maintaining the long-term focus on investment opportunities that has served Harvard so well historically.”

During the fiscal year, the endowment slashed commitments to private equity and real estate by $3 billion—to $8 billion from $11 billion. Yale President Richard Levin wrote a letter to faculty and staff explaining that the losses from these two asset classes would be offset by budget cuts, specifically staff layoffs and postponing campus expansion plans. 


In Depth

Q&A: Star Mountain's Brett Hickey On Investing In 'The Growth Engine Of America'

Sep 22 2017 | 5:06pm ET

Lower middle-market companies form the economic fabric of the nation, but they can...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

Don’t Overlook These 6 Hybrid Cloud Concerns

Sep 14 2017 | 6:27pm ET

Cloud-based technology solutions have made tremendous inroads into the alternative...

 

From the current issue of