Harvard's Endowment Taking Big Hit

Our contacts at Harvard's Faculty of Arts and Sciences (the division that includes Harvard College and the graduate school) told us that there is a pretty drastic hiring freeze because of losses to the university's endowment. Staff also received an email from the university's president, Drew Faust, in which (according to our sources) she said that Harvard may have to take out loans to cover operating expenses for the rest of the fiscal year. Departments have been told to cut back spending, including items that are part of this year's budget, and including taking steps like turning the lights off during the day when no one's around.

The reason? Harvard's $36.9 billion endowment is down 22% this year, and could be down by 30% by the end of the fiscal year. And the reason for that seems to be that much of the endowment was invested in private equity (which accounts both for the losses and for the uncertainty about how much will be lost).

More details in an article from today's New York Times business section:

Harvard Endowment Loses 22%

Read the rest of the article.