Harvard University’s Heritage Fund is in advanced negotiations to sell approximately $ 1 billion in private equity funds, at a time when the school faces financial uncertainties and pressures due to Donald Trump threats and a slow market for illiquid assets.
Harvard Management Co., which manages the largest Higher Education Heritage Fund in the US, is working with Jefferies Financial Group to unload the portfolio for Lexington Partners in a so -called secondary transaction, according to people with knowledge of the subject.
Lexington may later bring other partners as part of any purchase, said one of the sources, who asked not to be identified when describing private discussions. The terms of the agreement are not finalized and can still change.
A Harvard Management representative did not immediately respond to requests for comment. Lexington and Jefferies spokesmen refused to comment.
Universities were not immune to recent private equity pressures as markets remained unfavorable for portfolio companies.
The delay in investment returns pressured liquidity and forced many institutions to depend on the performance of their actions and government securities to meet the immediate cash needs.
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Harvard allocated almost 40% of its $ 53 billion patrimonial fund for private equity, according to an annual report for the year ended in June.
The Trump administration interrupted $ 2.2 billion in subsidies of several years to school, claiming that she could not apply civil rights laws to protect Jewish students.
Harvard sued the government this week, intensifying the dispute after refusing to give in to management requirements for change.
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Earlier this year, the school announced a suspension of hiring.
The president also suggested that the Internal Revenue Service (IRS) should tax the university as a “political entity,” a measure that would significantly affect school finances and make it harder to raise money from rich donors.
The government also suspended research funding at other Ivy League institutions, including Princeton University and Columbia University.
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The effort to sell the secondary portfolio began before the announcement of Trump fares and the latest twists in his fight with Harvard, one of the sources said.
Lexington, a Franklin Resource unit, is one of the largest investors in secondary transactions, which have gained popularity amid a drop in distribution of private equity managers.
Last year, Lexington closed a record secondary fund of $ 22.7 billion.
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Yale’s Heritage Fund is also exploring secondary sales.
Evercore is advising the $ 41 billion heritage fund in a process that has been underway for months, according to a Yale spokesman.
The background is still committed to private equity and is still making new appointments, the spokesman said. Yale did not disclose a target size for sale.
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Harvard’s heritage fund had arrived late to the private equity asset class, but has increased its participation in recent years.
The annualized 10 -year return of the fund was 7.6%. The most recent fiscal year presented a return of 9.6%.
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