The New York Times
December 4, 2008 Thursday
Endowment Nose-Dives At Harvard
By GERALDINE FABRIKANT
In a sign of the economic times, Harvard has sent a letter to its deans
saying that the university's $36.9 billion endowment fund lost 22
percent of its value in the last four months and could decline as much
as 30 percent by the end of the fiscal year on June 30.
Normally Harvard reports on the endowment's performance once a year, but
the letter signed by the university's president, Drew Faust, and its
executive vice president, Edward C. Forst, cited the ''current
extraordinary circumstances'' as the rationale for providing an interim
report.
Harvard depends on its endowment for about 35 percent of its operating
budget, and some of its schools rely on endowment income to cover more
than 50 percent of their expenses. As a result, the letter noted that
the endowment's performance would have a significant impact on budgets.
The decline, about $8 billion, does not capture the full extent of
losses, the letter said, because some investments are harder to value
and are valued only periodically.
For example, at the end of its fiscal 2008 year, Harvard said it had 11
percent of its holdings in private equity, 9 percent in timber and
agriculture, and a comparable amount in real estate. Each sector has
been hard hit in the current environment, but it is difficult to
quantify the decline on a daily or monthly basis. Harvard noted that its
private equity and real estate investments are managed externally.
Experts say that those markdowns could prompt a decline of an additional
three or four percentage points.
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Harvard Licenses Clothing Line Amid ‘Preppy’ Upswing (Update1)
By John Lauerman
Aug. 6 (Bloomberg) -- Harvard University, the world’s richest school,
licensed its name to a maker of designer clothes to take advantage of a
taste for seersucker, khakis, loafers and other “preppy” attire.
The clothing line, labeled Harvard Yard, will be made by New York-based
Wearwolf Group Ltd., which licensed the Cambridge, Massachusetts,
school’s name through its Verus Group subsidiary, Verus said today in an
e-mailed statement. The financial terms weren’t disclosed. Harvard has
the right to approve clothing designs, said Jeffrey Wolf, Wearwolf
executive vice president, in a telephone interview.
Designs from Harvard Yard, named for the grassy area encircled by some
of the school’s oldest buildings, will be sold in department and
specialty stores, Wolf said. Trousers starting at $195, shirts at $160
and up, and sportcoats costing $495 have been designed to reflect
Harvard’s “quality, heritage and excellence,” he said.
“Harvard is the ideal -- the pinnacle,” Wolf said. “When you think of
modern prep, you think of New England and the Northeast. You think
campus, quads, and you think Harvard.”
The licensing was arranged by IMG Worldwide Inc., a New York-based
sports, media and entertainment management company whose clients include
the golfer Tiger Woods. Jim Gallagher, an IMG Worldwide spokesman, had
no immediate comment. Nor did John Longbrake, a spokesman for the
373-year-old university.
Harvard obtained a trademark on the phrase “Harvard Yard” for clothing,
mainly T-shirts, in December, according to the U.S. Patent and Trademark
Office’s Web site. A second application, for use on shirts, pants,
jackets and other clothing, is pending.
Wearwolf makes private-label clothing for Cincinnati-based Macy’s Inc.
and Hampstead, Maryland-based Jos. A. Bank Clothiers Inc., Wolf said.
Making name-brand clothes has been “a dream of mine,” he said.
Harvard, established in 1636, estimates its endowment lost 30 percent in
the fiscal year ended June 30. While its fund remains the largest in
higher education, the school has frozen salaries, cut staff and scaled
back services, including hot breakfasts for students.
To contact the reporter on this story: John Lauerman in Boston at
[email protected].
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