{"id":645865,"date":"2010-01-28T02:24:55","date_gmt":"2010-01-28T07:24:55","guid":{"rendered":"http:\/\/www.businessinsider.com\/universities-failed-foray-as-wannabe-hedge-funds-results-in-massive-debt-2010-1"},"modified":"2010-01-28T02:24:55","modified_gmt":"2010-01-28T07:24:55","slug":"universities-failed-foray-as-wannabe-hedge-funds-results-in-massive-added-debt-just-to-make-ends-meet","status":"publish","type":"post","link":"https:\/\/mereja.com\/index\/645865","title":{"rendered":"Universities’ Failed Foray As Wannabe Hedge Funds Results In Massive Added Debt Just To Make Ends Meet"},"content":{"rendered":"

\"harvard<\/p>\n

Latest university endowment data shows that Harvard lost 29.8% on its investments in the fiscal year end June 2009. Yale lost 28.8%.<\/p>\n

While Universities’ foray as quasi-hedge funds hurt them badly, they actually outperformed the S&P 500 by a wide margin. Over ten years their endowments still managed to eke out a 4% gain, while the S&P 500 lost 20%.<\/p>\n

Steep recent losses have nonetheless forced many universities to leverage up with debt in order meet their spending needs, which seems a disturbing new trend in and of itself:<\/p>\n

WSJ:<\/a> More than half of the schools said they increased their endowment spending and 35% of institutions increased the amount of their long-term debt, many to cover the increased needs of student financial aid and meet basic operating expenses.<\/p>\n

Total long-term debt at these institutions rose to $167.8 million from $109.1 million the previous year. Average debt levels were driven upward by institutions with assets over $1 billion and by public institutions, the study said.<\/p>\n

“Public institutions don’t have much choice,” Griswold said. “Subsidies from state legislatures have been slashed and donations are down, it’s a double-whammy.”<\/p>\n

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