Turmoil in the financial markets is causing many top-tier schools to look for ways to cut costs as their endowments drop in value.
Several schools - including Harvard, Columbia and Duke universities - are seeking to unload private-equity holdings in an effort to shore up cash, the Dow Jones and various financial blogs reported last week.
Similarly reacting to the financial downturn, Brown and Cornell universities announced last week that they were going to freeze hiring as a cost-saving measure.
The Dow Jones cited anonymous secondary buyers familiar with the situation as saying that Harvard, Duke and Columbia are unloading private-equity funds because more-liquid sources of cash, such as stocks and bonds, are losing value.
Because many components of endowment size are reported with a lag, most schools were able to report gains for the fiscal year that ended on June 30. Penn, however, already reported a 3.9-percent loss for the last fiscal year because the proportion of its endowment that is valued each day is higher than that at many peer institutions.
Now, schools with larger percentages of their endowments invested in alternative asset classes, such as private equity, are beginning to react to lost value.
Duke, Columbia and Harvard, the report said, are seeking to sell at a discount price on secondary markets. Harvard is planning to offload approximately $1.3 to $1.5 billion in private-equity holdings, one of the largest sales of private equity in history.
In a letter to the Harvard community yesterday, President Drew Gilpin Faust hinted that the endowment has lost value in the past months.
"We need to be prepared to absorb unprecedented endowment losses and plan for a period of greater financial constraint," she wrote.
Late last month, Moody's Investors Service announced that endowment balances have most likely lost, on average, 30 percent of their value.
Both Brown and Cornell, which reported small endowment growth through June 30, have announced that their endowments have dropped in value.
Cornell - which is a land grant university and therefore receives some public funding - is freezing non-faculty hires through March and is delaying all new construction for the next 90 days.
Brown University has frozen hiring through January for all staff and administrative positions.
