Yale University is in the process of selling a private equity and venture capital stake worth up to $6 billion (about 8 trillion won). This is the largest transaction of its kind in history, where a single institution puts its existing stake on the market, and around $3 billion worth of assets is reported to have already entered the sales completion phase.
On the 10th (local time), The New York Times (NYT) reported that Yale's sale is a strategic decision aimed at securing liquidity and simultaneously reshaping its portfolio. Yale's fund posted a revenue of 5.7% last year, which was a disappointing performance compared to major stock indices, such as the S&P 500, with over half of its total assets consisting of private equity and venture capital-related assets, leading to delays in recovery and significant exposure to volatility risks.
The sale, codenamed "Project Gatsby," was conducted secretly and included funds from major firms such as Insight Partners and General Catalyst. Yale structured the sale conditions by bundling low-revenue "core" funds with better-performing "sweetener" funds, which reportedly include approximately $600 million in equity from Golden Gate Capital and half of a $1 billion fund managed by Bain Capital.
On Wall Street, this action is seen as Yale's prompt response to the structural changes in the private equity industry. As private equity firms face long-term investment recovery delays, Yale took proactive measures to realign its asset strategy. According to the NYT, some prestigious universities like Harvard University and major pension funds in the U.S. and Asia are also considering similar sales measures.
Political factors are also a significant background that cannot be overlooked. President Donald Trump has notified major Ivy League schools, including Harvard University, of federal budget cuts, while Congress is pushing a bill to strengthen taxation on university endowments led by Republicans. Consequently, Yale is interpreted to have early adjusted its asset management strategy in preparation for reduced federal funding and expanded taxation.
However, the sale has drawn particular attention as Yale has long established a pioneering position in private equity investments. The former Chief Investment Officer (CIO) David Swensen grew the fund from a mere $1.3 billion in 1985 to $42.3 billion by 2021, becoming a model for numerous universities. Even today, investment strategies utilizing private equity and venture capital are widely known as the "Swensen Model."
Nevertheless, Yale maintains that its long-term investment strategy through private equity will continue. In a statement, Yale said, "Private equity remains a core component of our investment strategy," adding, "However, we are also considering investments in new private equity managers."