BOSTON (Reuters) – Harvard University’s endowment has lost 22 percent or roughly $8 billion in the last four months, leaving the world’s richest university on track to deliver its worst returns in 40 years.
Harvard President Drew Faust broke the news in a letter to top administrators on Tuesday, according the school’s website. Traditionally Harvard speaks about its investment returns only once a year.
“We continue to plan for a scenario in which our endowment is down 30 percent in value for the year,” Faust said in the letter.
She warned faculty, staff, students and alumni last month that the university is looking for ways to cut costs as the Ivy League School feels the impact of the worst financial crisis since the Great Depression.
The school’s endowment grew 8.6 percent for the fiscal year ended June 30, to a new high of $36.9 billion despite double-digit losses in the broader stock market.
As early as July, Jane Mendillo, the school’s chief investment officer who oversees the endowment, warned that future returns may be lower, falling short of the 10-year annualized return of 13.8 percent when the median fund return was 6.1 percent.
(Reporting by Svea Herbst-Bayliss; editing by Richard Chang)
Wed Dec 3, 2008 3:23pm EST