Tags: stanford | private | equity

Stanford Flunks Private Equity Final

By    |   Tuesday, 13 Oct 2009 02:03 PM

Stanford University has some pretty high powered economists, but that didn’t help the school from losing big on private equity during the financial crash.

And now it’s trying to gain back at least $1 billion by selling the private equity stake, The New York Times reports.

An executive who’s part of Stanford’s auction to sell the holdings terms it “the biggest fire sale in private equity, ever” according to Dow Jones LBO Wire.

A potential buyer was almost as enthusiastic.

“For someone in our business, it’s a rare chance to get a portfolio of this quality and of this size,” the buyer said.

Elite universities were the talk of the financial world when their alternative investments surged upward in the years before the financial crash.

They aren’t looking so smart anymore. Stanford’s a good example. It put $12.6 billion into alternative investments (private equity, hedge funds, real estate and the like).

But, in the last fiscal year, the endowment plunged 27 percent, or $4.6 billion.

Now Stanford’s trying to cut its losses, and it’s not alone. Harvard’s endowment, the university world’s biggest, took a hit of 27.3 percent last year. Its attempt to sell $1 billion of assets earlier this year failed after investors showed little interest.

Many less famous schools are in better shape.

“You’re going to find a different pattern than you have in previous years when the largest endowments outperformed smaller endowments,” John Nelson of Moody’s Investors Service told Bloomberg.

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Stanford University has some pretty high powered economists, but that didn’t help the school from losing big on private equity during the financial crash.And now it’s trying to gain back at least $1 billion by selling the private equity stake, The New York Times reports.An...
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2009-03-13
Tuesday, 13 Oct 2009 02:03 PM
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