By Staff
Yale University’s $41.4B endowment is finalizing the sale of up to $2.5B in private equity and venture capital assets, according to reporting by Reuters.
The portfolio sale, code-named “Project Gatsby,” is purported to include an overall discount that is expected to be less than 10%. It is also expected to include a so-called “mosaic deal” that will allow buyers to cherry-pick specific investment funds they are interested in acquiring.
Multiple buyers, including Lexington Partners and HarbourVest Partners, have assessed the portfolio, noted the report. Earlier this year, Reuters‘ reported that Yale was exploring a sale of private equity fund interests and was being advised by investment banking firm Evercore.
As of June 30, 2024, Yale’s endowment had earned a 5.7% investment return, net of fees, representing $2.3B in investment gains.
“Given our significant allocation to private assets, we expect to lag during periods of strong public market performance, particularly when exit markets for private assets are depressed,” said Matt Mendelsohn, the university’s chief investment officer, told Yale News in October 2024. “As always, we remain focused on achieving investment success over the long term, knowing that doing so is likely to bring stretches of short-term underperformance.”
Roughly a third of the university’s annual operating budget comes from Yale’s endowment, a collection of thousands of funds, most of which have been designated to support specific aspects of the university’s core mission, according to information on its website. Three-quarters (75%) of the endowment is restricted; the university is legally required to use these gifts only for their stated purposes.
