Web Update: Yale announces 25 percent drop in endowment

Yale's endowment is down roughly 25 percent since the fiscal year that ended June 30, its president, Richard Levin, announced today.

Just two weeks ago, Harvard president Drew Faust also announced that Harvard's endowment - the largest of any American university - is down more than 22 percent since June 3. In recent weeks, Princeton's administrators have declined to give an updated figure for its current endowment value.

In an open letter, Levin said that as of Oct. 31, returns on marketable securities in Yale’s endowment were down 13.4 percent. “But this does not tell the whole story,” he said, explaining that further losses had been incurred since October and that illiquid asset holdings cannot be “value[d] with precision.”

He then estimated that Yale's endowment’s current value is $17 billion, down a quarter from its June 30 value of $22.9 billion. Levin added that he does not expect Yale's endowment to resume growth until “after June 30, 2010.”

Faust told the Harvard Crimson that Harvard’s endowment may drop by 30 percent by June 30, 2009, and that the 22 percent figure - which is as of Oct. 30 - may not fully capture the scope of the losses.

Princeton's endowment, managed by the Princeton University Investment Company, returned 5.6 percent in the fiscal year that ended June 30. In the same period, Harvard's endowment earned 8.6 percent and Yale's earned 4.5 percent. All three schools had posted double-digit returns in recent years.

All three schools have begun spending cuts, with Harvard announcing a freeze on most staff hiring and pulling back on the expansion of its Allston campus. Though Yale is definitely delaying several construction projects — including its new School of Management campus, biology building and renovations to its art gallery — and possibly delaying its two new residential colleges, it has not gone so far as to freeze hiring.

“We see the possibility, with so many schools freezing hiring, to do some terrific recruiting,” Levin told the Yale Daily News.

Yale will, however, mandate that all new position announcements be approved by its provost and that the growth in salary for non-union employees decrease. Levin has also announced a 5 percent cut in Yale's 2009-10 budget.

In late November, Princeton’s Board of Trustees approved pushing back $300 million worth of projects from its original 10-year capital plan, including a satellite storage facility for the Princeton University Art Museum, the Green Hall renovation, the psychology and neuroscience buildings, faculty and staff apartments and other renovations. The University will slow the rate of salary increases to faculty and staff for fiscal year 2010 and may not be able to meet demands for increased graduate student stipends, Provost Christopher Eisgruber ’83 said at the annual public meeting of the Priorities Committee on Nov. 17 and at a meeting of the Council of the Princeton University Community on Nov. 10.

More to come