PULSE POINTS:
❓What Happened: Yale University is attempting to sell a significant portion of its private equity and venture capital investments, reportedly up to $6 billion, due to underperformance and federal funding cuts.
👥 Who’s Involved: Yale University, private equity and venture capital firms, and the Trump administration.
📍 Where & When: Yale University, June 2025.
💬 Key Quote: “The investor that was the lead architect of investing in the private equity markets is pulling in its horns,” said Sandeep Dahiya, a finance professor at Georgetown University.
⚠️ Impact: The sale signals challenges for private equity markets, Ivy League endowment strategies, and higher education funding models in light of federal funding reductions.
IN FULL:
Yale University is reportedly nearing the completion of a major sale of private equity and venture capital investments. The Ivy League institution, known for its pioneering approach to endowment management, initially sought buyers for up to $6 billion of its portfolio but now plans to sell approximately $3 billion at a slight discount.
The move comes as Yale faces financial pressures due to the Trump administration’s move to cut federal funding for Ivy League institutions and disappointing returns on its investments. Its $41 billion endowment generated a 5.7 percent return last year, underperforming the broader market indices such as the S&P 500. Over the past decade, Yale’s endowment has achieved an average annual return of 9.5 percent.
Private equity and venture capital investments, which comprise nearly half of Yale’s endowment, have faced challenges in recent years as firms struggle to sell stakes in companies and return cash to investors. These difficulties have contributed to the university’s decision to reduce its exposure to such assets. Additionally, the university faces significant federal funding cuts, though Yale has yet to draw the same level of scrutiny from the Trump White House as fellow Ivy League universities Harvard and Columbia.
“This is a big deal,” commented Sandeep Dahiya, a finance professor at Georgetown University who has studied endowment performance. He added: “The investor that was the lead architect of investing in the private equity markets is pulling in its horns.”
Yale’s strategy of shifting away from traditional stocks and bonds toward long-term private investments has been widely emulated by other institutions.
