Forbes: Harvard Sold at the Bottom
Posted on October 27th, 2009 in Uncategorized | 2 Comments »
Forbes magazine reports that Harvard lost $439 million selling off its private equity portfolio at the bottom of the market last year.
Harvard never publicly disclosed selling any private equity, which has become a money-sucking disaster zone. In its fiscal year ending June 30, 2009, Harvard reported a 31.6% loss in its private equity portfolio. In addition to the $439 million net realized loss, the endowment recorded a $1.9 billion change in net unrealized losses in its private equity portfolio.
While it is unclear how much of its private equity assets Harvard managed to sell or at what price, it seems to have sold some assets when the market was at its weakest point….
What Forbes doesn’t get into is why Harvard to sell at the bottom: The university was running out of cash.
2 Responses
10/27/2009 9:33 pm
This begins to read like the script of a greek tragedy:
1. They gamble the operating budget to the market
2. They sell endowment funds at their lowest value levels
3. They stop construction at great cost to the community
4. They fire librarians, secretaries and section leaders
5. They freeze salaries of staff and faculty
6. They ask donors to fund operating expenses -gift for current use, not endowment
7. They discover a surplus of 60 million in the operating budget
8. Provost gets a 20% salary raise. Net increase equal salary of a librarian.
9. There is no plan in place to make sure the bleeding stops.
10. They tell everyone all is well and things are falling into place.
Should someone reprint that famous poster with Harvard’s final exam? what should they call it?
10/28/2009 4:49 am
And here’s an interesting article in the Chronicle of Higher Education:
http://chronicle.com/blogPost/Is-Your-Fiscal-Crisis-Real-/8613/?sid=at&utm_source=at&utm_medium=en
It’s in Marc Bousquet’s blog. Here are the crucial opening sentences:
“Is your administration using ‘the economy’ as an excuse to extort more work for less pay from an already overburdened faculty?
Buying Howard Bunsis a plane ticket to your campus might be the best investment you can make right now.
Bunsis, a Michigan professor of accounting and treasurer of the AAUP, has been tracking administrator claims of fiscal crisis for several months. His conclusion, published in this issue of The Chronicle, is that at many campuses, there’s no financial crisis at all. At many schools, tuition and other revenue is up, or existing reserves could easily cushion the shortfall.”