Yale University is considering selling part of its private equity portfolio in order to secure liquidity.
According to the April 23 issue of Yale News, Evercore is advising the university “in a process that has been in the works for many months”. If it goes through, the sale would be the first ever by Yale in the secondaries market.
The value has not been confirmed but according to speculation, it’s around US$6 billion out of Yale’s endowment of some $41.4 billion at the end of its last financial year in June 2024. This represented a 5.7% investment return, less than its ten-year performance of 9.5%.
“Given our significant allocation to private assets, we expect to lag during periods of strong public market performance, particularly when exit markets for private assets are depressed,” Matt Mendelsohn, Yale’s chief investment officer, said at the time.
But public markets are no longer performing so strongly now, and exit markets for private assets are still depressed.
Universities suffered significantly during the 2007-08 global financial crisis when their heavy holdings in alternatives were not as decoupled as expected from public markets and macroeconomic trends.
And now, university endowments are facing a dearth of private equity exit returns that has hit institutional investors across the board. According to S&P Global Market Intelligence, global private equity exit activity slumped to its lowest level in two years in the first quarter of 2025 as the US tariff turmoil battered markets, citing Preqin data that pegged exit value for the three months to March at $80.81 billion.
US universities are facing additional pressure from the Trump administration around proposals to raise taxes on endowments.
As prospects for exits and returns from private equity in particular become less attractive amid the current economic turmoil, those holdings may be become less worth holding on to. This might even represent a readjustment towards realistic valuations and away from overinflated levels left over from the halcyon days of the buoyant stock market of the past.
