Harvard and Yale Selling Off Private Equity Stakes

Harvard and Yale—titans of American higher education and longtime bellwethers of endowment strategy—are quietly offloading billions in private equity holdings. These moves, confirmed through multiple reports and market insiders, signal a significant shift in institutional investing, with potential ripple effects across the higher ed landscape and beyond.

The two Ivies, boasting the largest university endowments in the world ($50.7 billion for Harvard, $40.7 billion for Yale as of 2024), have long championed the “Yale model” of endowment investing: high allocations to illiquid assets such as private equity, venture capital, hedge funds, and real assets like timberland and oil. But the bloom is off the rose.

From Darling to Dilemma

Private equity once promised high returns, portfolio diversification, and access to elite deals not available to public investors. In the wake of the 2008 financial crisis, as traditional markets stagnated, institutions doubled down on alternative investments. For years, this strategy paid off—at least on paper.

But cracks have been forming.

Private equity valuations have come under scrutiny as deal activity has slowed, interest rates have risen, and exits through IPOs and acquisitions have dried up. Many private equity funds are now sitting on aging portfolios—so-called "zombie funds"—that have not returned capital in years. Meanwhile, limited partners like universities are increasingly liquidity-constrained, especially as operating costs rise and tuition-dependent revenues remain fragile.

Harvard Management Company and Yale’s Investment Office, once aggressive buyers, are now sellers on the secondary market. Reports indicate both institutions are using intermediaries to quietly market stakes in private equity funds—often at discounts of 10% to 20%, or more, below net asset value.

A Broader Retreat?

This retreat isn’t just about balance sheet management. It’s a broader reassessment of what endowments should be doing—and what risks they should be bearing.

Universities face mounting scrutiny over their massive, tax-advantaged endowments and their relationships with Wall Street. Critics question why institutions with social missions are entangled in opaque, leveraged, and sometimes predatory industries. Private equity firms, after all, have been deeply involved in sectors like healthcare, housing, for-profit education, and prison services—areas where returns often come at the cost of public welfare.

Moreover, the mismatch between the long lock-up periods of private equity investments and the growing need for financial flexibility is becoming more apparent. University administrators now must navigate volatile geopolitical conditions, student protests over divestment, and uncertain federal funding. Liquidity matters more than it did a decade ago.

The End of the Yale Model?

David Swensen, Yale’s late investment chief, revolutionized university finance with his embrace of illiquid alternatives. But times have changed. While the strategy made Yale’s endowment a model for copycats, today it may represent an outdated orthodoxy.

Harvard and Yale’s pivot may be the beginning of the end for the “Yale model” as we know it. Other institutions—especially smaller endowments that tried to mimic the Ivies—may find themselves stuck with toxic assets, unable to unload them without taking steep losses.

In fact, some mid-tier and small colleges may have to choose between covering operational costs and holding on to underperforming private equity positions. For those with limited financial cushions, the fallout could be existential.

Higher Ed’s Reckoning with Risk

The endowment shift also raises a philosophical question: What is the purpose of university wealth?

As elite schools back away from the riskier corners of Wall Street, perhaps it's time for a broader reckoning—about not just how universities invest, but why. Should institutions built on ideals of knowledge, access, and social progress be hand-in-glove with industries known for wage suppression, regulatory arbitrage, and asset stripping?

Harvard and Yale may be late to that moral realization. But their financial pivot is a sign that even the most powerful players can’t ignore reality forever.

In the age of growing student debt, declining public trust, and ballooning inequality, selling off a few private equity funds is a small move. But it could be the start of a larger shift—one where higher education finally begins to question whether its financial strategies align with its educational mission.

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If you have insights into university endowment strategies or are a whistleblower inside the private equity world, contact us confidentially at Higher Education Inquirer. 

The Harvard Scam: How Elite Schools Steal From You (More Perfect Union)

Shall we all pretend we didn't see it coming, again?: higher education, climate change, climate refugees, and climate denial by elites

Can US higher education do much to reduce climate change, either as a leader or as a teacher?  The answer so far is no. That's not to say that there aren't universities (like Rutgers) doing outstanding climate change research or students concerned about the planet's future. There are. But that research and resistance is outweighed by those who control higher education, trustees and endowment managers, and their financial interests. 

While devastating occurrences like Hurricane Helene (and possibly Hurricane Milton) serve as high-rated entertainment, news coverage also makes the stakes seemingly more visible to those who are not directly affected. 

For many, hurricanes, wildfires, tornadoes, and heat waves are quickly forgotten or remembered merely as single acts of god or seasonal anomalies, not as ongoing acts of greedy rich men. And melting icebergs and disappearing islands are something most Americans don't see, at least firsthand. Generations of data and information are ignored by those who are poorly educated and those who claim to be educated, but uneducated morally. 

Predictions of more global conflicts and an estimated 1.2 billion climate chaos refugees are barely mentioned in the news, but they are looming.   

Related links: 

Thinking about climate change and international study (Bryan Alexander)

How campuses engage with the climate crisis: a taxonomy (Bryan Alexander)

"Let's all pretend we couldn't see it coming" (The US Working-Class Depression)

Wealth and Want Part 1: Multi-Billion Dollar Endowments

US higher education reflects and reinforces a world of increasing inequality, injustice, and inhumanity. This system (or some would call it an industry) should function as a conduit between good K-12 education, good jobs, and the wellness of all its citizens, whether they attend or not. But increasingly, it does not. 

The first installments of the Wealth and Want series examine the concentration of wealth in the US higher education system.  And this article focuses on loosely regulated university endowments. While many American schools struggle to provide basic amenities and academic resources, elite universities boast endowments that rival the GDPs of small nations. And they pay little in taxes. 

The Endowment Elite and Ill-Gotten Gains

At the pinnacle of higher education wealth are Harvard ($49B), The University of Texas System ($44B), Yale ($40B), Stanford ($36B), and Princeton ($34B). These institutions have amassed endowments that provide a steady stream of income for investments, scholarships, and research initiatives. How their money is invested is rarely known.  

Endowment managers at elite schools typically make more than a million dollars a year. The most elite schools pay their managers $5M-$10M a year, with compensation largely based on returns. But those managers still get hefty salaries even when they lose money.

There are more than 120 schools with endowments greater than a billion dollars. But the 20 richest university endowments together hold more wealth than the other 5000 or so other higher education institutions combined. 

Elite endowments are often the result of centuries of fundraising, donations, and strategic (sometimes shady) investments. For many of the most prestigious schools, it began with land theft and generations of forced labor. 

For other wealthy schools, it was the result of philanthropic robber barons like Johns Hopkins (who also held captives), Andrew Carnegie, Leland Stanford, John D. Rockefeller, Cornelius Vanderbilt, and James Buchanan Duke who made their wealth through mass exploitation of people and the planet. 

For wealthy flagship state universities, it also came from land theft. In the case of the University of Texas, its wealth largely came from, and to some degree still comes from the exploitation of fossil fuels that jeopardize the planet.

Historical Context and Structural Inequality

• Land Theft and the Founding of Institutions: The establishment of many American universities, including Ivy League institutions and those founded under the Morrill Act, was often intertwined with land theft from Native American tribes. This practice, often referred to as "land dispossession" or "Indian removal," was a key component of Manifest Destiny and the expansion of European settlement across the continent.
• Ivy League Universities: Institutions like Harvard, Yale, and Columbia were granted land by colonial governments, which often acquired these lands through treaties that were coerced or violated. They also used enslaved labor to build and maintain their wealth.  
• Funding Models: The funding models for public higher education often favor larger, research-intensive universities. This can lead to underfunding for smaller, less prestigious institutions, particularly those serving marginalized communities.
• Endowment Inequality and Profits Over People and Planet: Endowments are a powerful tool for wealth accumulation and institutional advantage. The concentration of endowments in a few elite universities can exacerbate existing inequalities and create a self-perpetuating cycle of privilege.  These endowments have also engaged in shady investments that perpetuated worker oppression, genocide, and environmental destruction. 

Related links:

Pay and Chief Investment Officers: Good Money while It Lasts

Tax Wealthy Private Universities Now (Paul Prescod, Jacobin)