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Physicist, Startup Founder, Blogger, Dad

Monday, December 10, 2012

Harvard as giant hedge fund

Ron Unz seems to be getting some traction on Twitter with his observation that Harvard looks like a giant hedge fund ($30B AUM) attached to a smaller educational institution (annual budget about $1B?) for tax purposes ;-)
Paying Tuition to a Giant Hedge Fund: ... Harvard’s Division of Arts and Sciences—the central core of academic activity—contains approximately 450 full professors, whose annual salaries tend to average the highest at any university in America. Each year, these hundreds of great scholars and teachers receive aggregate total pay of around $85 million. But in fiscal 2004, just the five top managers of the Harvard endowment fund shared total compensation of $78 million, an amount which was also roughly 100 times the salary of Harvard’s own president.

... The typical private foundation is legally required to spend 5 percent of its assets on charitable activities, and with Harvard’s endowment now back over $30 billion, that sum would come to around $1.5 billion annually. This is many times the total amount of undergraduate tuition ...
However, there has been very little media attention to his analysis of meritocracy in elite higher education. The humorous hedge fund observation is merely a sidebar to the meritocracy article.

6 comments:

5371 said...

I think we all know the part of Unz's article that absolutely cannot get media attention. It's not the part about Asian-Americans.

disqus_ICH9SLPThp said...

I cannot imagine why people continue to give "charitable" donations to Harvard.

anonanonaon said...

It's important to note that no person has an ownership stake in that massive nest egg, so in this aspect (might this be the most important aspect?) Harvard's endowment fund is very different from a hedge fund. The managers of the endowment fund do get compensated handsomely, and there certainly are many others with a vested interest in seeing the endowment fund grow (without the impediment of taxes, of course), but these are small peanuts compared to the fund itself.

gide07 said...

And Unz's own explanation for that part is lame. If the figures are correct "something like" conspiracy is the only explanation. I don't know what that means. One possibility is ethnic chauvinism on the part of staff who themselves are members of the tribe. If other staff have no such chauvinism these numbers might result.

LondonYoung said...

Note that Harvard's structure pre-dates the U.S. Constitution which blesses any pre-existing arrangements ....

Cece Lianne said...

You got a point there. There's no way they can touch Harvard.

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