Earlier this month, Invoice Ackman made it clear that he’s on Trump’s aspect in his ongoing battle with Harvard. He accurately urged that Harvard has change into “a political advocacy group for one celebration.”
One of many the reason why Harvard is in a panic over this battle is as a result of their famously big endowment shouldn’t be almost the monetary powerhouse folks assume it’s. It might be giant, but it surely’s not liquid.
Ackman not too long ago broke it down in a prolonged publish on Twitter/X:
I consider it’s probably @Harvard’s that monetary place is overstated by the media and most people. I consider that is principally for 2 causes.
One, folks ignore Harvard’s $7.9 billion of debt excellent, which is more likely to enhance to ensure that Harvard to satisfy its money wants as a result of lack of authorities funding and decreased alumni presents.
Second, Harvard’s endowment is principally invested in illiquid personal property together with actual property, personal fairness, and enterprise capital funds.
Actual property and personal fairness funds are extremely levered so comparatively small adjustments in asset values can have a big influence on fairness values. For instance, if an actual property fund’s asset values decline by 15% and the property are levered 60%, the fund’s fairness worth will decline by 37.5%…
In my interview with @nfergus under, I mentioned the realizable values of Harvard’s personal property may very well be as low 40% of present carrying values if Harvard must liquidate substantial parts of its property to satisfy its obligations.
I’m informed by an knowledgeable I extremely respect on this area that my 40% low cost is far too excessive and a 7% – 15% low cost is a greater estimate.
Watch as Ackman analyzes the true worth of Harvard’s endowment under:
Invoice Ackman: “One factor I consider is that the personal fairness, enterprise capital and actual property portfolios are mismarked”
Ackman on Harvard and Yale endowment’s publicity to personal fairness and VC. Probably the greatest clips I’ve seen
From his latest interview at College of Austin pic.twitter.com/MZN2CpITDN
— Boring_Business (@BoringBiz_) Might 22, 2025
The purpose that Ackman is making right here, is that Harvard actually is in a horrible place in the event that they don’t get federal tax {dollars}. Their endowment shouldn’t be money sitting in a financial savings account. It’s tied up in a ton of various investments. The varsity may very well be in actual monetary hassle.
