Harvard Endowment Loses About $8 Billion

Discussion in 'Wall St. News' started by ASusilovic, Dec 3, 2008.

  1. Harvard University's endowment, showing how the financial crisis is shaking U.S. higher education, has suffered investment losses of 22% since then end of the school's fiscal year.

    The Harvard endowment, the biggest of any university, stood at $36.9 billion as of June 30, meaning the loss amounts to about $8 billion, more than the entire endowments of most colleges. In a letter to the school's deans, Harvard President Drew Gilpin Faust and Executive Vice President Edward Forst blamed "severe turmoil in the world's financial markets." (See Harvard's letter.)

    The letter said the 22% loss understates the actual decline in the endowment because it doesn't reflect certain assets, including private equity and real estate, for which estimates of their drops weren't yet available.

    Harvard officials said they were planning for a decline of 30% in value for the year. Harvard said the school's worst single-year investment loss was 12.2% in 1974, when the endowment stood at less than $1 billion and its funds contributed far less to the school's operations. Currently, income from the endowment funds 35% of Harvard's $3.5 billion budget.

    http://online.wsj.com/article/SB122832139322576023.html

    Turmoil everywhere...
     
  2. Corelio

    Corelio

    Yep...those private equity and real estate holdings now come to bite. Great equity curve "smoothers" on the way up...now they cannot dispose those assets in exchange for bananas.
     
  3. No worries... just value them at the purchase price.
     
  4. Hey, its only a loss when you sell it.
     
  5. $36.9 billion is still a lot of money, considering this only a non-profit org. Some countries don't even have that much capital in their treasury.
     
  6. Same as equities... that's why you NEVER sell...
     
  7. eagle

    eagle

    This type of mindset makes you hold longer on a loser expecting it will bounce back one day. Unfortunately, more often than not it goes lower and much lower with a few one day spikes from time to time to reassure your belief and then resume fading days after days and sometimes reach zero.

     
  8. I guess its time for harvard to shake down some parents, who have kids who arent that too bright for harvard.
     
  9. Daal

    Daal

    you know you are a buy and holder when.. you make plans for drawdowns :p
     
  10. that's like seeing a barrel flash and thinking 'you're only dead when the bullet hits you bra...'
     
    #10     Dec 3, 2008