<p>^^yes, we’re all waiting to see whether Amherst has to use that revolving line of credit they opened up to meet cash calls. That was one of the trip wires Moody’s recently listed as a possible danger signal. The odds are that someone will step forward and avoid embarrassing their new president.</p>
<p>Sometimes the grass just looks greener.</p>
<p>Middlebury’s endowment up 15.5%:</p>
<p>[Nought</a> 101 College endowments in recovery](<a href=“Burlington Free Press: Latest News in Burlington, VT”>Burlington Free Press: Latest News in Burlington, VT)</p>
<p>This one is interesting because they subcontract their endowment management to Investure in Charlottesville, VA – as do Dickinson, Smith, and other liberal arts colleges.</p>
<p>Easy come easy go. One nice thing UVa does is post monthly performance. Last post was as of 7/31/2011 and it was up about 15% from 2010 YTD.</p>
<p>[Despite</a> Market, Endowment Stays Steady | The Cornell Daily Sun](<a href=“http://www.cornellsun.com/section/news/content/2011/10/05/despite-market-endowment-stays-steady]Despite”>Despite Market, Endowment Stays Steady | The Cornell Daily Sun)</p>
<p>Interest-article on Cornell refinancing variable rate bonds. I have a very hard time believing that their endowment did not lose money in the first quarter.</p>
<p>[Private</a> equity firms prepare for portfolio write downs - Telegraph](<a href=“Private equity firms prepare for portfolio write downs”>Private equity firms prepare for portfolio write downs)</p>
<p>PE is the lifeblood of endowments. While the article cites 20%+ reductions in value I think the real number would be atleast 50%. If the economy doesn’t improve quickly endowments are going to get crushed by their PE investments. PE has always been and always will be a con-fidence game.</p>
<p>Its geared for inflationary environments and easy money. </p>
<p>Both are gone. The big endowment schools are going to have to make some serious adjustments.</p>
<p>I suspect that recent economic events are causing serious liquidity adjustments for beleaguered portfolio managers dealing with the stress.</p>
<p>[Blackstone</a> Reports a Loss Amid Tough Markets - NYTimes.com](<a href=“http://dealbook.nytimes.com/2011/10/20/blackstone-reports-a-loss-amid-tough-markets/]Blackstone”>Blackstone Posts $342 Million Loss Amid Tough Markets - The New York Times)</p>
<p>Things very, very bad in the alternative(sophisticated) investment world at the moment</p>
<p>[Financial</a> Reports, Financial Reporting: Office of the Controller](<a href=“Financial Management | It's Your Yale”>Financial Management | It's Your Yale)</p>
<p>Yale is amongst the first to issue their 2011 annual report.</p>
<p>What is striking is how different Yale and Harvard are managing their endowments after the 2008 crises. In general Yale has continued and is accelerating their dependence upon illiquid Private equity while Harvard is going the exact opposite direction and focusing on public equities and liquidity.</p>
<p>For example Yale has increased its allocation to Private equity by about 5% a year going from 20.2% in 2008 to 35.1% in 2011. Half of that allocation has come out of the generally more liquid hedge fund allocation which went from 25.1% to 17.5%. Meanwhile Harvard has taken down their allocation to PE to 12% and their endowment manager says they will take it down another 1% this year and has some very negative things to say about PE.</p>
<p>Harvard has also aggressively decreased its unfunded committments. Harvard now has less committments than Yale (who is at $5.5B) despite having double the endowment.</p>
<p>Harvard also mentioned its committment to maintaining 2% cash while Yale once again reverted to -1.1% cash in 2011 from +.3% in 2010.</p>
<p>Bottom line Harvard has really done a good job of reducing risk in its endowment, while clearly Yale has doubled down on risk.</p>
<p>[Financial</a> Administration - Annual Financial Report of Harvard University](<a href=“http://vpf-web.harvard.edu/annualfinancial/]Financial”>http://vpf-web.harvard.edu/annualfinancial/)</p>
<p>Harvard’s annual report. Interesting how different Harvard’s approach is to Yale. The concern that I think is there is that Harvard is very dependent on commodities and emerging markets. And those markets, IMHO, are very much dependent on China which is driving demand for commodities from emerging markets. Putting a big bet on China is a pretty risky thing.
I guess you could call this the Harvard model-we will see how it works out.</p>
<p>Hey, where would >>you<< park $26B? Not so easy these days …</p>
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<p>Forgive the non-reading lazy approach, but did they lower the commitments by funding them, or did they negotiate their way out by paying some sort of break-up fee? This is absolutely what everyone needs to do, I believe.</p>
<p>My impression is that Harvard has been more aggressive about selling their PE interests in the secondary market. When you sell your interest in a PE fund that fund includes investments that have been made and outstanding committments to that fund. Selling PE in the secondary market of late means taking a 25% hit to the funds NAV which is why some endowments are reluctant to sell into the secondary market.</p>
<p>4th floor-high yield domestic stocks have done extremely well of late-up 33% in the last endowment fiscal year beating I think all other types of investments–but high yield domestic stocks are not fashionable or sophisticated enough for endowments it seems.</p>
<p>[Harvard</a> fiscal 2011 financial report shows deficit | Harvard Magazine](<a href=“http://harvardmagazine.com/2011/11/harvard-fiscal-2011-financial-report-shows-deficit]Harvard”>http://harvardmagazine.com/2011/11/harvard-fiscal-2011-financial-report-shows-deficit)</p>
<p>Very good recap of Harvard’s $130M deficit.</p>
<p>What staggers me is again this year HYPSM were bailed out by significant increases in federal grant money for research-about every other income line item didnt do much. Here we are bankrupt as a nation can be and taxpayers are heaping hundreds of millions of additional dollars on the wealthiest universities in the world. Insanity.</p>
<p>It doesn’t seem right to me that selling your interest in a fund would have your future contractual commitment attached to it. If that were the case, you’d have a damn hard time selling it today.</p>
<p>Towards the end of note 4 in the annual report they reconcile the level 3 assets from year to year. They put an additional 4.2B, and sold 5.2B. It appears that some of the level 3 assets were marked up in addition to increasing from the added investment. Real assets and private equity had an increase of $2B or so in unrealized gains, but of course those are seriously suspect.</p>
<p>I’m a little confused by their $4.2B short position in fixed income. Not sure if these are so called repo positions or something different.</p>
<p>Glad I’m not running the portfolio.</p>
<p>[Harvard?s</a> Equity Holdings Drop by 24 Percent in Last Quarter | News | The Harvard Crimson](<a href=“http://www.thecrimson.com/article/2011/11/12/harvard-equity-holdings-drop-24-percent/]Harvard?s”>Harvard’s Equity Holdings Drop by 24 Percent in Last Quarter | News | The Harvard Crimson)</p>
<p>Example of the carnage done last quarter.Interesting to see if they are able to recover.</p>
<p>[Harvard</a> Said to Seek Sale of $1.5 Billion in Private-Equity - Businessweek](<a href=“Bloomberg - Are you a robot?”>Bloomberg - Are you a robot?)</p>
<p>Harvard really aggresively moving out of private equity while Yale is going the exact opposite direction. Personally, I think Harvard is making the right, responsible course of action. Interesting to see how this plays out especially in light of world-wide economic problems.</p>
<p>[Rice</a> endowment close to reaching pre-recession levels - The Rice Thresher - Rice University](<a href=“http://www.ricethresher.org/rice-endowment-close-to-reaching-pre-recession-levels-1.2695989#.TsKRqfLNn40]Rice”>http://www.ricethresher.org/rice-endowment-close-to-reaching-pre-recession-levels-1.2695989#.TsKRqfLNn40)
Rice is claiming to be almost back to where it was before the recession and touts “conservative” investment strategies as the reason.</p>
<p>Swarthmore reported strong fiscal year end endowment return of 24.6%. It’s endowment was at an all-time high, having exceeded the previous high set in Fiscal 2007.</p>
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<p>Endowment spending was towards the low end of the target range (3.8% of beginning endowment level) as the second of three years of budget cuts kicked in.</p>
<p><a href=“http://www.swarthmore.edu/Documents/administration/finance_investment_office/FinancialReport_10-11.pdf[/url]”>http://www.swarthmore.edu/Documents/administration/finance_investment_office/FinancialReport_10-11.pdf</a></p>