<p>[NZ</a> state pension fund looks to buy forest from Harvard | Reuters](<a href=“http://www.reuters.com/article/2012/05/02/newzealand-forest-idUSL4E8G22KN20120502]NZ”>http://www.reuters.com/article/2012/05/02/newzealand-forest-idUSL4E8G22KN20120502)</p>
<p>One more example of Harvard trying to get out from under its many illiquid positions</p>
<p>I thought Harvard wanted to keep those forests forever…</p>
<p>Well…we will see what Harvard gets for the property…if there is a deal.</p>
<p>And then there is this “hedge fund”: [News</a> Headlines](<a href=“http://www.cnbc.com//id/47261565]News”>http://www.cnbc.com//id/47261565)</p>
<p>Yeah…CHK…what a company…</p>
<p>More new debt-Columbia $271Million—$100Million taxable.</p>
<p>What were the rates Columbia had to pay?</p>
<p>[Dartmouth</a> College Whistleblowers Accuse The Trustees - Business Insider](<a href=“http://www.businessinsider.com/dartmouth-college-whistleblowers-accuse-the-trustees-2012-5]Dartmouth”>Dartmouth College Whistleblowers Accuse the Trustees)</p>
<p>We have noted here before how risky PE and Hedge Fund managers have come to excercise significant control over their Board of Trustees at the same time they are profiting mightily from the Universities investments in their highly leveraged funds. Seems that Dartmouth is the first to step out and start asking some good questions about just what is happening to their school. Clearly this isnt just going on at Dartmouth. Yale’s ties to Hillhouse Capital is a very good example of the same kind of relationship.</p>
<p><a href=“Dartblog.com”>Dartblog.com;
<p>[News</a> & Press - Large Investors Choose to Swim on Their Own](<a href=“http://www.preqin.com/item/large-investors-choose-to-swim-on-their-own/102/5206]News”>Preqin | Alternative Assets Data, Solutions and Insights)</p>
<p>Got to give credit to Harvard again for taking aggressive action to gain control over their illiquid investments.</p>
<p>This really is an incredibly important issue-gets directly at the issue of the integrity of our major institutions and for whose benefit these institutions are being run. I am surprised that it has not gotten more attention than it has in the past . Grateful that the people at Dartmouth are raising it up.</p>
<p>Great links…</p>
<p>Kind of sickening…</p>
<p>All the self serving creeps…</p>
<p>I wonder what this is going to do to Dartmouth’s financials…</p>
<p>Up to almost a billion in debt…</p>
<p>[The</a> Private Equity Exit Traffic Jam - Forbes](<a href=“http://www.forbes.com/sites/baininsights/2012/05/24/the-private-equity-exit-traffic-jam/]The”>The Private Equity Exit Traffic Jam)</p>
<p>Graph about half way down shows the steep drop off in PE exits since the last reporting period for endowments. This is creating serious problems now for endowments, particularly those heavily into alternative assets, as they need exits to create liquidity in their endowments.</p>
<p>[Staying</a> Afloat | News | Commencement 2012 | The Harvard Crimson](<a href=“http://www.thecrimson.com/article/2012/5/24/budget-financial-crisis-harvard/]Staying”>Staying Afloat | News | The Harvard Crimson)</p>
<p>Good update on status of Harvard’s finances. Not particularly upbeat. I think Harvard and others were hoping recovery they saw in 2010-11 would continue and they would be able to stop worrying about endowment and finances. Unfortunately 2011-12 is turning out to be very difficult and they are having to remain pretty tight-fisted.</p>
<p>Slightly off-topic, but maybe not totally irrelevant: what rates of return do university pension funds assume, and if the funds are effectively broke, just like public pension funds, will they chew up the endowments?</p>
<p><a href=“Fragile Calculus in Plans to Fix Pension Systems - The New York Times”>Fragile Calculus in Plans to Fix Pension Systems - The New York Times;
<p>Harvards financial statements are available online. Their projected rate of return on long term assets is 7.5%. That’s about what everyone else is using. And equally as wrong as everyone else.</p>
<p>Their pension obligations are pretty much fully funded, but the present value of their future healthcare benefits to retirees is about 3/4 of a billion, and it is not specifically funded, although they note that they have “internally designated” 300+ million dedicated to that obligation.</p>
<p>I’d rather be retired from Harvard that from a lot of municipalities.</p>
<p><a href=“Dartmouth board members are accused of enriching own firms”>Dartmouth board members are accused of enriching own firms;
<p>Glad more people are asking questions about this issue. There’s no wonder some of these endowments have so much invested in risky, illiquid hedge funds and private equity. Who on the school’s Board is going to step forward and ask if their college is taking too much risk when a quarter of the Board members work in this field and are making big bucks off of the college’s investment in their funds. If this isn’t a serious conflict of interest I don’t know what is, and isn’t it these colleges that are supposed to be teaching our kids about ethics.</p>
<p>Artcle concerning Dartmouth Board conflicts is from pensions & Investments magazine if this link doesn’t work.</p>
<p>The Dartmouth situation smells.</p>
<p>Pensions are going to have to be cut. The sooner the better for the taxpayer. The sooner the better for employees…so they won’t rely on promises that are not going to be kept.</p>
<p>^^^ dstark, you are running for office? :)</p>
<p>^^^ dadx, a shortage in the order of $1B won’t make much of a dent on endowments above $15B, but for schools with endowments in the $3B range, doesn’t this pose a significant threat?</p>
<p>Presumably smaller and less free spending universities than Harvard will have a proportionately smaller future liability.</p>
<p>It appears that many of them have terminated the old defined benefit plans. Princeton has, and Wesleyan seems to have. Wesleyan’s future healthcare obligation was only 36 million, as far as I can tell in the notes the the 2010 statements. </p>
<p>The universities are a lot more concerned about their overall endowments than they are with retirement benefits. This is going to be an ongoing struggle for them until they can work out from under their investment “commitments” in these illiquid funds. Right now, if they had any sense, they would all be holding their breath about what is going to happen.</p>
<p>[State</a> reviewing Dartmouth conflict of interest claim | Reuters](<a href=“http://www.reuters.com/article/2012/05/29/dartmouth-endowment-idUSL1E8GT9CS20120529]State”>http://www.reuters.com/article/2012/05/29/dartmouth-endowment-idUSL1E8GT9CS20120529)</p>
<p>Looks like things are heating up a bit with the Dartmouth endowment. Some other mighty powerful universities might be getting a little nervous over these developments</p>
<p>I did not go to Dartmouth. Dartmouth says the reason for everything being on the up and up with its endowment, was because, Dartmouth starting investing in funds before the fund managers had ties to Dartmouth. Therefore, everything is kosher going forward.</p>
<p>I find this reasoning flawed, and if this kind of reasoning is what is taught at Dartmouth, I am glad I did not go to Dartmouth. </p>
<p>Activities can start out kosher…and become contaminated.</p>