Yale’s public holdings decline

The public securities Yale holds in its own name fell to the lowest total value reported in a quarterly filing in more than five years, according to a report the University filed with the U.S. Securities and Exchange Commission Nov. 15.

The total value of the securities dropped to $259.4 million, the lowest available through the SEC’s electronic archives, which date to 1999. It fell $78,702,000 since the last filing in August. The University no longer holds seven of the 18 securities it held in August, though it has picked up three new ones.

Though the decrease follows an overall downward slope in Yale’s public securities investments, the previous quarterly filing had marked a two-year peak for the University’s holdings.

Because Yale holds more than $100 million of securities in its own name, Chief Investment Officer David Swensen is required by federal law to disclose those investments to the SEC in a quarterly 13(f) report. The Yale Investments Office declined to comment about this quarterly filing, but it provided the News with a letter detailing general 13(f) filing practices.

According to the letter, securities listed on the report include internally managed funds, funds once controlled by terminated private managers and gifts to the University.

Most of the University’s investments are privately managed and are not listed in the report, the letter states.

John Griswold ’67, executive director of the Commonfund Institute, the educational arm of a group which provides fund management and investment advice to many universities, said the success of university endowments across the country is due in large part to diversification, but he said private management is a key ingredient because many of the best investment managers in the field are employed in the private sector.

“Something David Swensen has said over and over again is that the yields in the private markets are higher than those in the public markets,” Griswold said. “Public markets are relatively inefficient, and the efficient market is what the smart investor works for.”

Though Yale’s investments helped net a $2.1 billion endowment return in the last fiscal year, some, including members of the UnFarallon Coalition, have argued for greater investment disclosure from Farallon Capital Management and other private equity investment corporations.

“It’s kind of absurd that the only information we have to comment on represents about two percent of the endowment.” UnFarallon supporter Phoebe Rounds ’07 said.

Farallon currently manages a total of $9.86 billion in equity capital for Yale and other universities, according to the Institutional Investor.

Since the previous quarterly filing, Yale no longer lists many of its holdings in the medical and financial fields, including the medical information Web site WebMD Corporation; the medical waste management company Stericycle, Inc.; Pharmion Corp., a pharmaceutical company that produces medicines concerned with blood disorders and cancer; Alliance Data Systems Corp., which creates private label credit cards; and Doral Financial Corp., a mortgage company.

Holdings in AT&T Wireless Services Inc., the mobile phone company, and some of its iShares in Morgan Stanley are also no longer on the list. iShares are publicly traded shares of a portfolio tracking a market index, not shares of a company.

The report shows $8.89 million invested in SPDR, a security designed to track the S&P 500, which did not appear on the previous quarterly report. It also newly lists $476,000 in Opsware, Inc. — a service providing software to automate data collection — and $204,000 in the Exxon Mobil Corp.

Comments

  • FrederickMiller

    I seem to have a difficult time finding a way to watch Eli football games on TV.
    I know that they are shown on Versus from time to time but it would seem that
    with the thousands of alumni and parents, etc. that there would be easy access
    to any games being covered. If so I’d appreciate reading about it in one of
    the Yale Daily News issues. Thanks in advance (I hope).