A Feast for Finance Nerds

Harvard University recently issued its annual report.

Here is a link:

https://finance.harvard.edu/files/fad/files/fy19_harvard_financial_report.pdf

Finance nerds will be especially interested in the report on Harvard's famous endowment, a landmark example of institutional investing with an unlimited time horizon.

The university gets revenue from a number of sources: research oriented subsidies, gifts, tuition ... but distributions from the endowment accounted for roughly one third of the income in the fiscal year that ending on June 30, 2019.

The report of that endowment consists of pages 12-17.

You can learn there that the balance sheet consists of 46% equity. That is a rather high percentage (it is broken down almost evenly between public and private equity). Another 33% consists of hedge funds. Harvard has gotten only a mediocre performance out of its hedge fund allocation, less than it has gotten out of public equity and far less than it had gotten out of private equity.

There are a lot of directions in which one might take that thought. But I'll leave off here. Oh, and the photo above is of Harvard's Business School.

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