<p>Harvard's endowment management company will fire as many as 50 workers, including investment professionals, after $8 billion in losses. Times are tough all over.</p>
<p>Bloomberg.com:</a> U.S.</p>
<p>GReaaaaaaaaaaaaaaaaaaaaaaaaaaat!</p>
<p>So what effect will this have on incoming and current students?</p>
<p>I doubt it will have any effect at this point.</p>
<p>Can Harvard apply for stimilus package?</p>
<p>The us is going dooooooooowwwwwwwwn</p>
<p>8 billion? </p>
<p>Ouch.</p>
<p>They've probably lost a lot more than $8 billion. They're just not putting a value on all the worthless junk in their investment portfolio that no one wants to buy, so there's no established market value for it. Unfortunately the staff they're cutting are probably lower-level people, not the geniuses at the top who got them into this mess.</p>
<p>The 8 billion is just all they've had to report; some estimate it could be significantly worse than that.</p>
<p>In any case, Harvard, I still love you.</p>
<p>One article I read sometime ago said that Harvard reported 22% loss (by 10/31/08), which they said was still better than the general market loss, meaning that they are doing a better job. Therefore, they were still entitled for bonuses. </p>
<p>One more recent article said that Harvard tried to unload 1.5 billion asset (not exactly liquid / hard to value/ not very valuable at current time) and failed to find buyers. Harvard did manage to sell some bonds to (probably) cover operating costs. </p>
<p>I wonder about Yales situation, since Harvard and other college endowments all bought illiquid assets by copying Yale.</p>
<p>I don't understand the reaction on those getting joy out of this. Harvard is a great institution adjusting to a downturn in the investment world and the economy. They will come out of it. Other institutions may not fare as well, though everyone is adapting and downshifting. This will ultimately affect student aid and educational quality -- since they can't freeze professor hiring and salaries for years.</p>
<p>I dont think anyone is getting joy out of this. In the current economic environment, people are all stressed and very easy to go negative. I do have problems with money managers of endowment funds (or any other funds) continue to reward themselves with bonuses, while the school is trying to raise money through selling taxable bonds. Some of those managers made so much money that Harvard students and faculty were so enraged a few years ago, the board actually set the cap of 25 million for the annual pay of the money managers, which resulting in a few top managers leaving the Harvard endowment fund, since they made 30some millions before. The problems are regardless of how the funds are doing; the money managers are never losing.
Look at this 18 billion government bail out money just got redistributed as bonuses on Wall Street! It is beyond outrageous. Reform is definitely an urgent need.</p>
<p>30...million...a year??</p>
<p>I think it's more corresponding to the financial crisis. Let's get out of here!!</p>
<p>Harvard will most likely go back to a more vanilla approach to investing and doesn't need all those people now.</p>
<p>But even if they had invested in run of the mill stocks in big cap companies, their losses would still have been significant. Face it, there was no where simple to hide last year from debilitating losses except for in cash.</p>
<p>The top universities and their endowment funds were not victims of the economic collapse; they were a cause. The 22% decline that H and others are reporting only concerns marketable securities. It's actually well over 50%. The problem is that these $10 Billion+ endowments had moved out of marketable securities [bonds and equities] long ago and instead were investing in hard commodities (timberland, oil stored on offshore tankers[remember the run up in gas prices, guess whose speculation was contributing?]}, hedge funds, real eastate developments, raw land etc. There were and are huge losses in these.</p>
<p>And, yes, the universities will be bailed out and the same people will pay for this bail out as will pay for the government's crapulus bill. Get ready for those tuition hikes. You didnt really think that the universities would actually dig deep into their already depleted endowment funds and cut enough of their bloated budgets to balance the books did you? So much for that prior posturing that they shouldnt have to spend their endowments because they are holding them as "rainy day" funds. Well it's pouring out, where's that umbrella now?</p>
<p>As happened with Banks and IBs, I am expecting mergers of Ivies.
Say H+MIT, Brown+Y, Columbia+NYU etc.</p>
<p>Actually, NYU recently "acquired" polytechnic -- I think a good deal for students of both schools.</p>
<p>So in the future when we write, "HYPMS" we may be referring to one institution.</p>
<p>They actually tried that Harvard MIT merger thing decades ago and came very close. The harvard faculty and trustees balked however because their boys were gentlemen and should study the arts, language philoshophy and literature. Science and math were for the lower classes. Summers tried decades later to move Harvard toward a more balanced curriculum, by promoting engineering, CS etc. and cutting back on some of the junk/pop courses at harvard college. [BTW, He had the support of a majority of undergrads, the professional schools and science and engineering but was fought to the death by the liber arts FAS, whose ox was getting gored. And then of course he gave them an opportunity to go after him in the press by not parsing his words to their standards when giving a speech extolling the importance of increasing the number of women in engineering and science. A little bit of a digression, I know. ]</p>