“Fourthly, in strictly monetary terms, the University is holding land it values at $969 million in its most recent financial statements—an asset, outside the endowment, on which it is presumably earning little, if any, return. At a time when the endowment itself is being remade wholesale to improve lackluster returns, holding land for future use may have become too much of a luxury. One of the most valuable assets in MIT’s investment portfolio is its Kendall commercial properties. (Similarly, Princeton and Stanford benefit financially, and in other ways, by owning commercial office/research parks near their campuses.
Perhaps by happy coincidence, Harvard Management Company’s decision to reduce the endowment’s real-estate holdings somewhat diminishes the University’s exposure to real estate overall, making it a more comfortable proposition to monetize some of the Allston property.”
Operating budget and investment returns are the two biggest factors in growing the endowment.
Post by Marcelino Pantoja
