Take Apart:

Overall, it’s a swing in the financial fortune of one of the country’s top private universities and one of the world’s most esteemed Jewish institutions of more than $1.3 billion, well more than 10 times the losses from the portion of Yeshiva’s portfolio invested with Madoff. Students who applied to and enrolled at a school that had spent aggressively for 10 years now find themselves at one where drastic budget cuts need to be taken, assets need to be sold off, and key operations relevant to the school’s status as a top-tier institution, such as the graduate schools, are being cut. To get back on track, Yeshiva would have to find a way to generate growth in the school’s student and donor base (e.g., tuition hikes, increases in enrollment, and funding solicitations) sufficient to balance its budget and pay down its debt, while slashing its budget and selling off assets in a way that doesn’t hamper that growth. Yeshiva is now selling off at least ten of its buildings in an effort to generate cash, and it has entered into an agreement with Montefiore Medical Center to operate the university’s medical school in a deal that rids Yeshiva of a major annual expense while risking its status as a leading research university.

 
Yeshiva had a greater % of Hedge Fund investment than any other University endowment in America:
 

How to lose a fortune

 

EPIC FAIL: Sell bonds, Swap into Hedge Funds

 

Source: Take Apart

 

Category: Corporate Management, Hedge Funds, Investing, Really, really bad calls

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12 Responses to “How to Lose a Billion Dollars in Hedge Funds”

  1. Rich in NJ says:

    That is an inexcusable breach of their fiduciary duty.

  2. VennData says:

    Everyone wants bankers tossed into prison for the financial crisis, shaming them isn’t enough everyone says (even though what they did was legal under Bush’s Ownership Society, supported enthusiastically by all the GOP Congressmen you see griping about Dodd-Frank and Fiduciary rules, I might add.)

    The pillars of the community board members at Yeshiva are the ones who should be pointed to. Greed. You get greedy and this is what happens. Shame the board members who hired the dopes that did this to Yeshiva.

    The good news: Religious schools? We could use less of them.

  3. CD4P says:

    Sounds like what happened to Harvard. Was Larry Summers a consultant for Yeshiva on the side while he administered Harvard???

  4. BennyProfane says:

    I read that CALPERS doubled down on this junk after ’08. How are they doing?

  5. Robert M says:

    How do you have your position as President renewed when not only did you have the schools fortune stolen w/ self serving policies but you ruined(?) your own families by tagging along w/ Madoff?

  6. Alex says:

    It wasn’t Harvard, but their neighbor Boston University that almost destroyed itself, back in the late 80′s, I think. All thanks to the hubris of their then president, John Silber. BU doesn’t seem to have figured it out, when they made him chancellor I thought they were just kicking him upstairs and he could ride off into the sunset, but he stayed and stayed.

    BU should have been a textbook case of how not to handle your endowment, but it didn’t get much press outside of the academy and anyone who wants to ignore it does.

    I predict more events like this, as the Masters of the Universe get into areas they don’t understand and try to “create value”.

  7. Joe says:

    My condolances…

    It’s not pleasing to see your own alma mater in desperate straits.

    My UC Berkeley is very different than the way it was when I left it.

    So it goes….

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