Harvard is shying away from Yale investments guru David Swensen’s investing strategy, at least a little.
Many of the country’s top endowments have long followed Swensen’s “Yale Model,” which advocates investing assets in “alternative” areas such as private equity and real estate instead of the stock market, and which has helped earn Yale the highest returns in the country in past years. But Harvard’s endowment managers are planning to sell up to $500 million of the university’s $5 billion real estate portfolio, the Wall Street Journal reported today.
Since the real estate market is still lagging while other parts of the economy, including the stock market, are recovering, Harvard’s investment managers hope to reduce the funds they have invested in property and invest them in better opportunities. According to the Journal, they are willing to sell any chunk of Harvard’s $5 billion in property holdings and future commitments to their property.