Duke University Endowment

[johnb]

We got an email a couple of weeks ago from President Brodhead reassuring us that the endowment was doing okay. I heard today that a number of universities were unable to make capital calls on their investments, which will lead to huge hits. There are many examples of individuals getting creamed recently (eg, on NPR this morning, Aubrey McClendon, an '81 Duke alum who Forbes said was the 138th richest American in 2008--announced that he'd lost 95% of his stock in the company he co-founded-- Chesapeake Oil--because of his use of margin; similarly, the biggest donor to the hospital that I work has seen his net worth drop from $2 or 3 billion to $100 million). Neither of these guys will be eating dog food to survive, but it does underline the bad economic times (as if people need reminding).

Anyway, I also heard today from a well-connnected Wall Streeter that among the universities that were about to announce huge losses, Duke was the single school that had taken the biggest hit for having bet aggressively on some privately-held investments.

This is, of course, rumor, but I was wondering if there had been any sort of announcement or public discussion...

[johnb]

Followup

http://www.clusterstock.com/2008/11/harvard-yale-et-al-down-25-30-

[weezie]

Wow, this is disturbing. I'm sorry to read this....

[roywhite]

Sorry to hear about endowments of Duke and other major universities taking a hit. Some have invested pretty aggressively and managed to out-perform stock market indices over the last several years.

An interesting factoid is that the Milton Hershey School, a grade school/secondary school originally established for orphans, has an endowment that would put them somewhere in the top 10 of American universities. This thanks to Mr. Hershey and thanks to the enduring appeal of chocolate.

http://www.forbes.com/global/2006/0109/082A.html

[Turk]

Wow, this is disturbing. I'm sorry to read this....

I'm disturbed to learn McClendon is a Duke grad. I'm sorry, I don't have a whole lot of sympathy for rich folk who overleveraged themselves.

As a hoops fan, I also dislike his involvement in moving the Sonics from Seattle to OK City.

[devildeac]

I'm disturbed to learn McClendon is a Duke grad. I'm sorry, I don't have a whole lot of sympathy for rich folk who overleveraged themselves.

As a hoops fan, I also dislike his involvement in moving the Sonics from Seattle to OK City.

Paging DevilAlumna.

[YmoBeThere]

I'm disturbed to learn McClendon is a Duke grad.

I'm curious why where he went to college is a factor at all...

[Bluedog]

I'm disturbed to learn McClendon is a Duke grad. I'm sorry, I don't have a whole lot of sympathy for rich folk who overleveraged themselves.

As a hoops fan, I also dislike his involvement in moving the Sonics from Seattle to OK City.

He has donated millions of dollars to Duke including the funding for the namesake McClendon tower in Keohane quad, and specified that it must serve alcohol as one of his conditions for funding. That's pretty cool. I'm not disturbed that he's a Duke grad since he's given a lot back to Duke. which I am grateful for.

[dpslaw]

Here's an article on UVa's endowment, which appears to have declined in value from $4.6 B to $2.9 B:

http://c-ville.com/index.php?cat=141404064432695&ShowArticle_ID=11801011083790800

And here's an article in the Daily Pennsylvanian which makes reference to Harvard, Columbia and Duke "off-loading" PE holdings:

http://media.www.dailypennsylvanian.com/media/storage/paper882/news/2008/11/11/News/Financial.Crisis.Starts.To.Take.A.Toll.On.College. Endowments-3536148.shtml

[dpslaw]

Here's a snippet from the Yale Daily News:

"The investment managers of Harvard, Columbia, Duke and other universities are offloading assets and considering other radical steps to brave the credit crunch, Dow Jones reported Friday. Harvard and Duke have hired a firm, Cogent Partners, to sell off some of their assets at a significant discount on secondary markets. Bids for the Harvard portfolio could be worth between $1.3 billion and $1.5 billion, secondary buyers told Dow Jones."

[budwom]

It might be wise to consider this information while keeping in mind that many of these top college endowments have been growing at absurdly fast rates (>20%) over the past several years. Easy come, easy go.

Furthermore, many college endowments were known to be playing around in the oil futures market, a highly speculative passtime.

I suppose this is what happens when a lot of top colleges have a lot of grads at places like Goldman Sachs, Lehman Brothers, Bear Stearns et al, and those grads convince their alma maters how easy it is to get extremely high returns on their money. Sometimes.