Opinion: Harvard’s Endowment Losses “Tip of the Iceberg”

Harvard’s endowment losses of $8-billion “might be only the tip of the iceberg of illiquid investments,” writes Edward Jay Epstein, a journalist and author, in a column for online magazine The Big Money.

Harvard’s money managers, writes Mr. Epstein, pursued an aggressive, nontraditional strategy that included hedge funds and other illiquid investments that made the money more difficult to recover once the economy collapsed.

“As late as June 2008, the fund kept almost no reserve of cash or Treasury bills and allocated a mere 6 percent of its money to fixed-interest bonds. It also borrowed more than $1-billion to amplify the returns on its less conventional investments. So by the time the bubble burst in the fall of 2008, only a small fraction of the endowment-fund investment was even under the jurisdiction of the SEC,” he writes.