<p>Harvard</a>, Private Equity and the Education Bubble - DealBook Blog - NYTimes.com </p>
<p>I offer no opinion about the accuracy of the guesses here.</p>
<p>So what exactly is he predicting the final damage to be?</p>
<p>It seems like he mostly talked about individual sections of the portfolio being damaged and didn't quite comment on the total number.</p>
<p>Most press articles state the down 25-30% estimate. Financial types actually discuss 30-40% declines, once you factor in the impact of mark-to-markets on the private equity assets and other illiquid holdings.</p>
<p>While many of these assets may actually perform well over time, given the cash requirements of Harvard's operating expenses and the need to honor commitments to the investment funds Harvard is in, the endowment will be squeezed for the next year or two (unless the economy takes off in late 09).</p>
<p>It's foreseeable that the top private endowments look like this in July 2009:</p>
<p>Harvard $23-27 billion
Yale $15-18
Princeton $13-15
Stanford $13-15
MIT $7-9
Columbia $5 - 6
Penn $5 - 6
Northwestern $5 - 6
Chicago $4.5 - 5.5
Cornell $4 - 5</p>
<p>It's all bad. The loss of money is bad. The loss of intellectual prestige is bad. Looks as if these schools were very much part and parcel of the whole big mess.</p>
<p>:(</p>
<p>I hate to see my baby suffer. Even with your plummeting endowment, Harv, I still love you!</p>
<p>Solid article - it finally makes sense to me why Harvard is issuing bonds and trying to sell PE investments (selling the liquid assets would lock in losses, and skew the portfolio towards illiquid asset classes).</p>