Some of the country’s most elite institutions are offloading parts of their private equity portfolios. As funds take longer to return money to investors, Harvard and Yale are selling at a discount with endowments looking for more liquidity and flexibility amid economic turbulence.
But both sides of such deals can make surprising gains.
This portfolio maintenance doesn’t appear linked to President Donald Trump’s attack on university finances, including a possible tax hike on endowments. Industry skeptics think these sales, however, highlight growing concerns that returns in the opaque world of private equity aren’t always all they’re cracked up to be.
“With elite universities’ private equity investments on the auction block, the big reveal is coming,” Nir Kaissar, founder of asset management firm Unison Advisors, wrote in a Bloomberg opinion column on Thursday.
University endowments typically make for ideal investors in alternative assets—with virtually infinite investment horizons, they can ride out wild gyrations in the public markets by locking up billions of dollars over several years.
