Harvard is the richest university in America. Last month, its endowment value was pegged at $37 billion.
But, the managers of that pot are panicking like rookies, hitting the exits trying to dump its holdings in private equity funds.
According to Bloomberg, "Investors led by Harvard University, which manages the largest U.S. endowment at $36.9 billion, may increase so-called secondary sales of private-equity funds to more than $100 billion during the next year, overwhelming available pools of capital."
With graduates like Bill Gates, Steve Ballmer, and Jim Cramer, Harvard will be just fine. The news does point to one of the next big problems created by the credit crisis-there are a lot of colleges and universities which cannot support themselves if the values of their endowments drop by 40%. They simply do not have the surplus capital to cover scholarships, infrastructure improvements, and operating costs.
Stay in high school as long as you can.
Douglas A. McIntyre
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