Now it turns out according to Edward Jay Epstein on Huffington Post that Harvard was even more careless with its endowments.
They maybe lost $18 billion -- 50% of the value of their endowment.
Okay. It might be that the fund's value was inflated by its managers so they could walk away with large bonuses and hence was never ever really worth $36 billion. Still any way you slice and dice it, Harvard starts looking worse than YU...And they did not have a Madoff-like scandal.
Yikes. The smartest people in the world over there at Harvard Yard lost half of their endowment money? That sounds a bit irresponsible.
Harvard University's admission that it lost $8 billion from its $36 billion endowment fund, as staggering as it sounds, may grossly underestimate the true magnitude of the loss between from July 1 through Oct. 31 2008. According to a source close the Harvard Management Corporation (HMC), which runs the fund for Harvard, the loss is closer to $18 billion if the losses on the fund's illiquid investment are realistically appraised.More details of the losing Harvard investment strategies over at Huff Post.
...Harvard University, which relies on the interest from its endowment fund for one-third its budget, needs to be more realistic. As its President, Drew Faust, noted in letter to the Harvard faculty, "We need to be prepared to absorb unprecedented endowment losses and plan for a period of greater financial constraint..."