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Wednesday, December 3, 2008

Harvard Endowment Down $8 Billion in 4 Months

And it may get worse (The Harvard Crimson):

The estimate of 22 percent may not fully capture the actual losses from this period, Forst said in an interview yesterday, as some of Harvard’s money is invested with external managers that have yet to report their latest figures. Faust and Forst wrote in yesterday’s letter that the University should plan for a 30 percent drop-off in endowment value for the year ending June 30, 2009.

The endowment is now at a level last seen around 2005-06 (not long ago, but 2-3 years of outsized returns gone in four months). In addition, while nobody wants to be a forced seller in this environment, Harvard may have no choice:
Multiple media outlets recently reported that Harvard was also seeking to shore up endowment holdings by selling $1.5 billion of its private equity portfolio at a drastically reduced price, but Forst declined to address those reports yesterday.