Posted by: admin | October 14, 2008

Harvard Endowment Selling Portfolio of PE Commitments

Harvard University’s Endowment fund is shopping around to sell its portfolio of PE fund commitments in one of the largest secondary sales of all-time!  If Harvard is looking to sell, this is not good news for the PE industry, as it implies the Endowment fund is under-weight in this alternative asset management sector.

The Ivy Leaguer has retained Cogent Partners to pitch what could be one of the largest secondary sales of all time, with an optimistic asking price in excess of $1 billion. The available portfolio includes a variety of venture capital and buyouts funds, albeit none of its crème de la crème VC (i.e., Sequoia Capital or Kleiner Perkins).

Link to article of Harvard selling stakes in PE firms

Harvard’s endowment fund is run by very smart portfolio managers and has consistently achieved positive returns for the past couple decades.  However, it will be interesting to see how its performance will do for the next year or so.  Given this, it still had an outstanding 2008 FY:

Harvard University’s endowment earned an 8.6% return during the fiscal year ending June 30, 2008, bringing the overall value of the University’s endowment to $36.9 billion.

The endowment’s return of 8.6 % puts it above the fifth percentile of the 165 large institutional funds as measured by the Trust Universe Comparison Service (3.2% and well above the median (negative 4.4%). Relative to the major U.S. indices, the endowment out-paced the negative 13.1% registered by the S&P 500 Index in Fiscal Year 2008 and the 7.1% registered by the Lehman Aggregate Index (which is a broad measure of bond market performance).

The 8.6% return for the last fiscal year brings the endowment’s annualized 10-year performance to 13.8 % and the 5-year annualized return to 17.6%.


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