Yale has joined the growing list of institutions being hammered by the current financial crisis. The Ivy League university has seen a loss of at least 13.4% – and probably more like 25% – in its endowment portfolio.
President Richard Levin has revealed that the value of Yale’s marketable securities has fallen by the former number between 1 July and 31 October, while once other investments and drops since then were taken into account it was probably down by the latter number, putting it at $17 billion.
“It is important to recognize that $17 billion is still a very large endowment,” he says. “This was where the endowment stood as recently as January 2006.”
It is also worth noting – as Levin does – that the endowment has declined significantly less than most of the rest of the financial world. Still, cuts in budgets and salary restraint is now the name of the game at Yale.
The New York Times notes:
That figure is significantly better than Harvard’s endowment, which recently said that the value of its $36.9 billion endowment had fallen 22 percent during the same period and that the total decline for the full fiscal year is expected to be as much as 30 percent.
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Endowment experts follow Harvard and Yale in particular because Yale has had the best performance with its endowment investments over the last decade, with Harvard a close second. Yale, whose portfolio was expanded beyond stocks and bonds into alternative investments by Mr. Swensen in a widely imitated strategy, has posted a 16.3 percent average annualized return, while the comparable number for Harvard was 13.8 percent.
Another university out of pocket is Yeshiva University in New York. According to the Chronicle of Higher Education this institution lost $110 million in Bernard Madoff’s high profile Ponzi scheme.
More coverage
Yale says its endowment lost 25 percent since June – Reuters
Yale University’s Endowment Falls 25% to $17 Billion – Bloomberg
Yale to Trim Budget as Its Endowment Falls 25% – WSJ
Yale endowment drops 25 pct amid financial turmoil – AP