Stock Crash Trimmed Harvard Endowment
CAMBRIDGE, Mass. (AP) _ Harvard University’s multi-billion-dollar endowment dropped 7.2 percent in value when the stock market crashed in October, the university announced.
The endowment’s decline amounted to $290 million, but the percentage drop was far less than the 22.62 percent fall the market took in its worst plunge ever.
Harvard said its endowment that month dropped from $4.14 billion to $3.85 billion, but its officials praised the university’s investment managers for preventing greater loss.
″The university is indebted to (them) for their superior management ... during a period of great change and instability,″ said Robert H. Scott, Harvard vice president for finance.
He said the endowment was protected by a decision late last summer to shift much of its investment from stocks to cash and bonds.
Various futures and options techniques the week of the crash reportedly produced additional protection.
The endowments of many colleges and universities fell in value because of the crash, which wiped out $500 billion in wealth in a single day.
Nearly two-thirds of Harvard’s endowment had been in stocks before the shift last summer, and the university said it got nearly a 20 percent return on its money during the year ended June 30.
Scott and Harvard Treasurer Roderick M. MacDougall said the university did very well during the fiscal year ended June 30, increasing the amount of the endowment by 17 percent to $4.02 billion.
But Scott said the stock market crash could hurt fund-raising efforts.
″The change in the market tells me that we’re going to have to spend a great deal more time and money in this area,″ he said.