Wednesday, October 12, 2016

‘Disappointing’ HMC Returns Will Pressure Budgets, Faust Says - ANDREW M. DUEHREN and DAPHNE C. THOMPSON, Harvard Crimson

The near $2 billion drop in Harvard’s endowment will limit funding for University programming, a “disappointing” development that has prompted a reconsideration of Harvard Management Company’s entire investment strategy, University President Drew G. Faust said in an interview Tuesday. Last week, HMC announced that the endowment—the largest of any university in the world—had lost almost $2 billion in value, shrinking to $35.7 billion in value at the end of fiscal year 2016, down from $37.6 billion at the end of fiscal year 2015. A negative 2 percent return on Harvard’s investment portfolio combined with other financial flows, including the $1.7 billion HMC distributed to fund Harvard's over a third of the Harvard's annual budget, to result in the endowment’s drop in value.

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