Lots of people are speculating about why Harvard’s investment managers have suddenly divested from Israel.

Could be an entirely bottom-line thing, of course. But some suggest that Harvard anticipates Israel invading Iran, and the university doesn’t want its money in an unstable wartime economy.


UPDATE: A suggestion that it’s about Israel’s recent upgrading to a developed economy.

Yaacov Heen, Cellcom’s Chief Financial Officer, said the divestment is in response to Israel’s recent reclassification as a developed economy.

… “There are some funds which invest only in emerging markets,” continued Heen, the Cellcom CFO. “So Harvard had to sell our stock because Israel is no longer classified as an emerging market and they no longer have the ability to hold this stock within the emerging markets fund.”

“We have seen a real change in the volume of trade since they reclassified us,” he said. “In the longterm this is good news for us because there is now more money that can be invested in Israel, but in the short-term it means we need to work to find new investors.”

“The problem is that Israel is very small compared to other developed countries so we have to compete on a much higher level,” Heen added. “When we traded against emerging countries it was very easy to compete for investors.”


ANOTHER UPDATE: The emerging market thing does seem to have been the reason.

Harvard said the change had taken place because Israel had been part of its emerging markets portfolio but the country’s status had been upgraded to developed market.

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One Response to “Why the Exodus?”

  1. Brad Says:

    So somebody somewhere decides Israel is emerging market, therefore invest; then whoever decides Israel is not emerging market, therefore divest. What was a good investment in a company one minute is not the next minute because Israel is reclassified by persons unknown using criteria unknown. How bright is this?

    Is this what happened?

    Harvard’s investment managers are generally considered, by professionals in the field, the-best-of-the-best-of-the-best.

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