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Harvard and Yale lose cash in crash
Source: Agencies |
September 12, 2009, Saturday
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HARVARD and Yale, America's two richest universities, say their endowments lost roughly 30 percent of their value last year, showing how severely the financial crisis battered even the world's best managers.
Both schools, long admired for delivering top-notch returns for years, warned about the declines late last year when their presidents told students, faculty and alumni about upcoming heavy cutbacks.
Harvard, located in Cambridge, Massachusetts, said on Thursday its endowment dropped 27.3 percent, or US$11 billion, to US$26 billion in the year that ended on June 30. Despite the loss, the endowment has still returned an average of 8.9 percent every year for the last decade while the average comparable fund has risen 3.2 percent, according to research and consulting firm Wilshire Associates.
Harvard's investment decline, the biggest in four decades, forced the 373-year-old school to lay off staff and interrupt a campus expansion across the Charles River.
Yale in New Haven, Connecticut, said its endowment shrank a larger-than-expected 30 percent to US$16 billion in the fiscal year that ended on June 30. The drop means that Yale will have an annual deficit of US$150 million from 2010-11 to 2013-14, Yale President Richard Levin said.
He also said the school will cut another 5 percent from non-salary expenses this year after having already reduced staff and non-salary expenses 7.5 percent this year.
Both schools, long admired for delivering top-notch returns for years, warned about the declines late last year when their presidents told students, faculty and alumni about upcoming heavy cutbacks.
Harvard, located in Cambridge, Massachusetts, said on Thursday its endowment dropped 27.3 percent, or US$11 billion, to US$26 billion in the year that ended on June 30. Despite the loss, the endowment has still returned an average of 8.9 percent every year for the last decade while the average comparable fund has risen 3.2 percent, according to research and consulting firm Wilshire Associates.
Harvard's investment decline, the biggest in four decades, forced the 373-year-old school to lay off staff and interrupt a campus expansion across the Charles River.
Yale in New Haven, Connecticut, said its endowment shrank a larger-than-expected 30 percent to US$16 billion in the fiscal year that ended on June 30. The drop means that Yale will have an annual deficit of US$150 million from 2010-11 to 2013-14, Yale President Richard Levin said.
He also said the school will cut another 5 percent from non-salary expenses this year after having already reduced staff and non-salary expenses 7.5 percent this year.
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