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While the value of Columbia’s endowment rose a relatively measly 2% last fiscal year, our friends in Cambridge saw their endowment grow 8.6%. But the tables are turning. Between June 1 and October 31, the WSJ estimates, Harvard lost about $8 billion — that’s 22% — of its endowment. Well, yikes. No word yet on how much Columbia lost in the same period.
In other news regarding Harvard-related losses, beloved newsstand Out of Town News announced a few weeks ago that it will be closings its doors. More business for the COOP we guess.
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@disagree 22% loss in a managed fund is not modest; it’s catastrophic, significantly worse than most hedge funds right now. People redeem money from funds that lose that much, and they blow up.
Columbia bought a lot of Manhattan real estate, which it’s going to develop, increasing the property value. There hasn’t been as substantial a drop in property values on Manhattan because demand is still very strong.
Finally, if Harvard’s 3.5bn budget is 35% funded by the endowment, that’s 1.225 billion of the endowment spent each year. Columbia has stated that it spends 5% of the endowment each year. If Harvard does the same, we can assume the endowment is worth about 20*1.225 = 24.5 billion right now, a big-ass loss. Then again, maybe Harvard only spends 4% of 30.6bn, or some other smaller fraction, etc.
@put it this way if Harvard is releasing their numbers now, that’s because they probably think their losses are modest. Columbia just finished buying up the neighborhood when this all started to happen, so our losses are probably going to look more severe.
@Cantabridgian No… not out of town news :( That place has been an institution for me since I was a youngin’.
@post 10 is wrong Harvard’s historically superior ROI is not an indicator of what will happen going forward.
For example, Harvard may have invested more aggressively for the past 10 years while Columbia may have been very conservative. This scenario would benefit Harvard in good times and benefit Columbia (relatively) in bad times.
I’m not saying that is what happened. I am just saying that the fact that Harvard has performed better in the past does not mean that Columbia is doubly screwed now.
@poster 10 You raise an excellent point. Also, I didn’t pay enough attention to the article, because I think they’re as confused as Bwog. The news is that certain Harvard investments lost 22% of their value. The WSJ then applies 22% against the full endowment value to derive an 8 billion dollar loss.
Note that the article acknowledges as much when they say: “The Harvard letter said the 22% loss, from July 1 through October 31, understates the actual decline in the endowment because it doesn’t reflect certain assets, including private equity and real estate, whose declines couldn’t yet be estimated. Currently, endowment income funds 35% of Harvard’s $3.5 billion budget.”
In summary:
1) For FY 07-08, Columbia broke even (the Spec correction) while Harvard picked up 8.6%
2) In the first four months of FY 08-09 (July 1-November 1) certain Harvard investments lost 22% of their value. Other assets also lost value. The actual dollar amount that these losses come to are more or less unknown.
3) The $8 billion number is made up.
4) We have no idea how Columbia’s corresponding investments are doing, but they’re probably in bad shape too.
5) I still stand by my point about pledges not being cash on recieved. Columbia pulled in $400 million in receipts last year. I’m curious to see what that number looks like for 08-09 relative to our peers.
@here's a really frightening thought: one way or another, Harvard has lost at least 22% of its endowment value (as someone pointed out, investments are likely part of its endowment) since June 30, 2008. Considering that Harvard has always performed much better than Columbia, we’re fucking screwed right now. One year from now it’s going to be a bloodbath as endowment values are announced.
Here’s another thought: a lot of the capital campaign dollars are pledges (I might be off on this, but I think Universities can treat pledges as binding in some circumstances). A lot of pledges aren’t in straight up cash. For example, I’m fairly certain that the Kluge pledge of $400 million is actually tied to the value of certain assets.
So yeah. Screwed.
@hmm In either case, Columbia can’t compare to Harvard…
@A. Whitney Griswold In conclusion, the entire post is wrong.
@asdfasfd Bwog’s reporting sucks. This post is totally wrong, confusing investments and endowments, and confusing various fiscal years.
And the post on ROTC was idiotic. The speculations were all ok, but they showed a complete lack of imagination, and\or took columbia too seriously. That is, they went only at macro political\cultural shifts, and only then did superficial analysis–why should liberals follow liberal groups instead of barack obama, a hero, who was just elected president?
the analysis should have looked into how the voting happened, who voted, etc….
@Eh oj As the wsj article states, harvard lost 22% on its investments, not actual endowment. Columbia still lost 2% on its investments
@ZvS Mea culpa for the incorrect information in my tip… kinda. WSJ says the total endowment is $36.9B, which means $8B is, in fact, 22% of the entire endowment. Unless their logic is also wrong. (I didn’t think there was a large portion of the endowment kept out of the market, but I’m not sure of that.)
Got a better source for the CU endowment data? It doesn’t seem to be as widely publicized.
@ZvS But, yes, Harvard was up 8.6% for FY ’09 [corresponding to Columbia -2%], then down 22.6% in the last four months [corresponding to Columbia ??].
@alum as an ex-columbian and current harvard grad student, I have to say it’s nice that I can get news about both here now.
@A. Whitney Griswold This is wrong. Harvard lost 22 percent since June 30 (FY ’09).
The 2 percent loss for Columbia was in the year ending June 30. In comparison, Harvard’s endowment INCREASED 8.6 percent in that period.
@This is wrong As noted in the Spectator’s correction, the endowment actually went up for the FY 2008.