… another form of betting, in these troubled times, involves estimating how much money various universities have really lost from their endowments.
Harvard’s money managers are widely considered some of the best in the business, and still this year they reportedly may lose up to 30% of the university’s endowment.
Harvard’s own estimate is in the twenties; here you’ve got thirty… Let’s see what Edward Jay Epstein says in Slate:
[Harvard’s] recent loss of $8.1 billion from July 1 to Oct. 31, 2008, came as a stunning blow. Yet this huge loss, as staggering as it sounds, might be only the tip of the iceberg of illiquid investments. According to a source close to the Harvard Management Co., the damage, if the fund’s illiquid investments are realistically appraised, may be closer to $18 billion—or more than twice the amount previously reported.
Exotic, esoteric, risky, volatile — These are the words Epstein uses to describes Harvard’s “playing for high-stakes in the casino economy.” An insider friend of his “finds the claim by Harvard’s money managers that the fund lost only 22 percent at best ‘purely Pollyannaish.'”
You know how they could have saved a little awhile back… Before the totally predictable change in the economic climate… They could, back in casino days, have paid their money managers a little less than 25 million dollars a year. Each. Remember? When people got upset about those salaries (They were even higher than that on occasion. One year, they got 35 million.), Harvard cut back on them by a few million, and the money managers immediately quit. As who wouldn’t.
Ah. Grand days.
July 16th, 2013 at 7:50AM
[…] instead of making the industry standard for their job description (with bonuses and all, around thirty million a year at that time), they were stuck (because of alumni protests about over-compensation) at around ten, fifteen […]