Harvard Endowment Falls 27.3% (biggest percentage decline in 40 years)

New York Times ^ | 9/10/2009 | Geraldine Fabrikant

[SeekAndFind]

Harvard’s endowment tumbled 27.3 percent in its latest fiscal year, largely because of problems with its private equity and hedge fund portfolios, lopping off $10 billion and shrinking its portfolio to $26 billion.

The loss is the biggest percentage decline at Harvard in 40 years and has prompted a review of how it manages its money and allocates assets. Jane Mendillo, who took over the endowment on July 1, 2008, intends to manage more of the school’s assets directly instead of using outside money managers and to hire additional people to oversee the management by outsiders.

In her letter describing the dismal results for the year ended June 30, Ms. Mendillo said she was adding a chief operating officer as part of this initiative.

Harvard had signaled earlier this year that the fund might be down as much as 30 percent, and it seems to have benefited only slightly from the upswing in the stock markets this year.

Although other endowments at major universities suffered declines, many did better than Harvard, which has been known over the years for its investing prowess. The University of Pennsylvania, for example, was down 15.7 percent. A survey of foundations and endowments with assets of more than $1 billion by Wilshire Trust Universe Comparison Service found an average decline of 17.06 percent in fiscal 2009. A year earlier, Harvard’s endowment gained 8 percent, raising its total to $36.9 billion.

While Harvard aims to outperform, it also establishes a policy portfolio with a benchmark index for each asset class. Weighting its assets in each category and using those benchmarks, Harvard underperformed its policy portfolio by 2.1 percent.

Of six investment classes, four failed to meet their benchmarks. In a couple of cases the shortfall was sharp.

[Suz in AZ]

Benjamin Franklin, in one of the Silence Dogood letters, said of students of Harvard,

"...they return...as great blockheads as ever, only more proud and self-conceited."

lol

I like Ben.

[TexasFreeper2009]

That's just it, they don't have the best and brightest, they have the liberal and the unqualified affirmative action recipients.

[FormerACLUmember]

72.7% short of optimum for leftist elitist Harvard.

[FormerACLUmember]

Benjamin Franklin, in one of the Silence Dogood letters, said of students of Harvard, "...they return...as great blockheads as ever, only more proud and self-conceited."

Brilliant and 100% accurate 250 years later. This precisely my personal experience with two folks I know who went to Harvard.

[OrangeHoof]

Harvard and Yale...America’s twin scourges.

[Nosterrex]

The best thing for this country would be for all the Ivy League schools to vanish along with their faculty and students. Better yet, send them to Russia. Let them have to deal with these idiots.

[LeonardFMason]

CCL = Couldn’t care less

[grey_whiskers]

What makes you think they would be the "best and the brightest" at anything else, including managing other peoples' money?

Because they're continually telling us that they are...

Cheers!

[grey_whiskers]

Russia is the county which screwed up the Ivies. See also Communist infiltration...

Cheers!

[Earthdweller]

They should redistribute the remainder to the Universities across the country in the form of a tax. Practice what you preach.