<p>Interesting to me that when this thread first started 3 years ago nobody felt colleges would role back their need-blind admission policies and now we are seeing one school after another do just that. Seems that the UVA issue with their President is largely over money and rolling back things like admission policies and teacher compensation.</p>
<p>As best as we can tell, the UVa President was fired because she wouldn’t move fast enough to do more online courses (including selling for-credit undergrad 100% online classes to non-resident students, possibly in partnership with a corporation), and because she did not want to slash staffing and spending in liberal arts departments. She also did not endorse cutting need-based financial aid. </p>
<p>Even IF there were valid disagreements with the UVa President, no one can understand the rush to suddenly remove her, except that the chairperson of the board had her term expiring in a couple weeks.</p>
<p>There are many public universities that are experiencing much worst circumstances than UVa - many others have less demand from out of state and international students who are willing to pay high tuition, and they have decreasing state funding instead of frozen state funding. Also, UVa has the highest average endowment per student by far of any public university, and the very highest bond rating, which results in low borrowing costs. </p>
<p>“The University of Va. is one of only two public universities with top bond ratings from all three debt-rating agencies: Standard & Poor’s (AAA), Fitch Investors Service (AAA), and Moody’s Investors Service (AAA).”</p>
<p><a href=“http://www.virginia.edu/Facts/Glance_FinanceEndowment.html[/url]”>http://www.virginia.edu/Facts/Glance_FinanceEndowment.html</a></p>
<p>In addition, UVa is located in an area with a moderate cost of living.</p>
<p>[Merkin</a> Settles New York Fraud Suit For $410 Million | FINalternatives](<a href=“http://www.finalternatives.com/node/20865]Merkin”>http://www.finalternatives.com/node/20865)</p>
<p>Some good news for some endowments. When Dartmouth considers the potential harm associated with conflicts of interest on their Board they ought to hang a picture of this guy on the wall of the conference room.</p>
<p>U Penn just published an article that they took out a couple hundred million of taxable 100 Year bonds. I had never heard of 100 year bonds before. They are paying about 4.4%.</p>
<p>[The</a> Daily Pennsylvanian :: Penn sells first ever 100-year bond](<a href=“http://www.thedp.com/index.php/article/2012/04/penn_puts_aside_300_million_to_modernize_buildings]The”>Penn sells first ever 100-year bond | The Daily Pennsylvanian)</p>
<p>News article about Penn’s 100 year bonds. There also was an article in the alumni magazine.</p>
<p>When I first saw those Penn bonds for sale…I was excited. </p>
<p>Penn will be around for a lng time. Then I saw they were 100 year bonds…</p>
<p>No thanks…</p>
<p>june 30 marks the end of another endowment year. Don’t believe the numbers are going to be very pretty this year based on the results of sectors they invest in:</p>
<p>Emerging markets and commodities down 15-20%
PE and hedge funds down 5%
US stocks up 5%(they dont invest there though)</p>
<p>Will be interested to see allocation to private equity as investors are still having a big problem getting cash out of the general partners. My guess is PE allocation will grow again this year.</p>
<p>My guess is they report declines of 5% or so while PE allocations, hedge funds refusing to release money, and liquidity issues continue to be a problem.</p>
<p>Interesting, sm74.</p>
<p>I posted on another thread that I have a friend that works in PE. He said PE firms are just selling stuff to each other so the firms can continue to collect the fees.</p>
<p>My friend said he would never invest in PE. Management gets all the returns. ;)</p>
<p>The investment manager of Notre Dame was on CNBC today. I think he said he managed a PE firm. And he runs ND’s money. I don’t know…another conflict of interest?</p>
<p>“management gets all the returns”-confirmed today as it was revealed who paid $120M for the painting The Scream—Apollo Globals Leon Black.</p>
<p>Yep…</p>
<p>The guy dstark refers to is Steve Judge, he is currently the CEO of the Private Equity Growth Capital Council, not a PE firm…also i think he oversees ND money,not actually runs it… I watched the interview this Am…</p>
<p>Yes…</p>
<p>[PEGCC</a> Names Steve Judge President and CEO - Private Equity Growth Capital Council](<a href=“http://www.pegcc.org/newsroom/in-the-news/pegcc-names-steve-judge-president-and-ceo/]PEGCC”>http://www.pegcc.org/newsroom/in-the-news/pegcc-names-steve-judge-president-and-ceo/)</p>
<p>I guess he doesn’t run ND’s money.</p>
<p>I believe he sits on the board of trustees at ND…</p>
<p>Ok…</p>
<p>With all the focus on Bain and Romney I have really noticed a big PR push from the PE industry the past few months hence this guys appearance. What strikes me is his confirmation of the fact that endowments-especially major ones-have very much hitched their ride to private equity. And Leon Black very much represents what PE is which is no different than the good old days of Michael Milken and Drexel Burnham-their old firm which was much more accurately described as a leveraged buyout shop.</p>
<p>Looking more closely at the inner workings of PE it is clear that its future and the future of the endowments is still closely tied with the investments PE made in the few years leading up to the 2008 crash. They are still strggling to find a way out of those investments. You can see the lack of exits in the attached information from the Pennsylvannia pension system which actually reports cash distributions from its investments. For example, the Apollo 6 fund from 2005 has only distributed to PERS 5.2M on a 40M committment or only a little more than 10%. the TPG 5 fund from 2006 has distributed 13M on a 100M committment. And if you look at some of Apollo’s and TPG’s major investments like Ceaser’s Entertainment you have to wonder how difficult the exits are going to be .</p>
<p>[url=<a href=“http://www.portal.state.pa.us/portal/server.pt/community/investments/14381]Investments[/url”>http://www.portal.state.pa.us/portal/server.pt/community/investments/14381]Investments[/url</a>]</p>
<p>Bottom-line is the endowments are heavily committed to a very risky asset class with a very uncertain future especially if the economy doesn’t improve.</p>
<p>Sm74, I like that info.</p>
<p>What I think is forgotten is how much debt went into these pre 2008 deals that is still out there and will be virtually impossible to be paid off. For Example:</p>
<p>Ceasers Ent (Apollo,TPG) - debt 20B and growing, annual revenue 8.8B
Freescale(TPG,Blackstone) - debt 7B, annual revenue $4B
TXU(largest LBO on record-TPG,KKR,others)- 40B debt, annual revenue 7B</p>
<p>Good luck trying to find buyers for this stuff. What is incredible is that Ceasers and Freescale actually did go public and some idiot bought their stock. Nevertheless the PE companies are still sitting on huge losses with these companies, 7B in equity was put into the purchase of Freescale and investor stock is now worth about $1.5B and on the way down.</p>
<p>Hmmmm, those deals don’t look good.</p>
<p>I wonder if the Boards of these colleges understand what companies they own. For example heavily indebted Freescale has most of its business in auto related chips. Intel announced they were getting into that business. Intel spends more money on toilet paper than Freescale spends on research. They have no chance against Intel. If you had told a board member 20 years ago that the University owned a small chip maker with declining revenue and almost double the debt than revenue as opposed to Intel he would have thought you were crazy.</p>
<p>Doesn’t look like the boards do understand what they own.</p>
<p>Interesting point comparing INTC and Freescale.</p>