Harvard predicts looming markdowns to private assets
The managers of Harvard University’s $51bn endowment have warned of substantial markdowns to come in its private equity and venture capital portfolio, predicting heavy losses for institutional investors.
The largest US university investment fund expects “meaningful adjustments” to its private fund holdings at the end of the year, it said on Thursday, as annual audits force private equity and venture capital funds to cut the valuations of unlisted assets.
Harvard’s endowment lost 1.8 per cent for the year ended June 30, 2022, although it still outperformed the S&P 500, which fell 11 per cent, as its portfolio of private assets mitigated a sharp drop in public stock markets.
Harvard sold $1.1bn of private equity funds in the summer of 2021 amid a market it characterised as having “significant ebullience”, a manoeuvre it believes avoided what will now be large discounts.
While Harvard’s endowment lost ground, the Yale endowment gained 0.8 per cent for the year ended June 30. The endowment for Columbia University lost 7.6 per cent, it said on Wednesday.
This story originally appeared on: Financial Times - Author:Antoine Gara
