Yale University will sell around US$2.5 billion in private equity assets, as the United States government moves to increase taxes on private universities.
The university’s endowment is in advanced negotiations to sell the portfolio at an overall discount of less than 10%, according to Bloomberg.
Yale first confirmed that it was aiming to sell its stakes in April. “The university is exploring a sale of private equity fund interests and is being advised by Evercore in a process that has been in the works for many months,” a university spokesperson told the Yale Daily News at the time.
The sale would reportedly allow buyers to select certain investment funds to acquire from Yale’s portfolio in a “mosaic deal”.
This will be Yale’s first major sale of private equity assets on the secondary market.
Republicans in Congress introduced a plan to dramatically increase taxes on private non-religious university endowments last month, with President Donald Trump’s support. Universities like Yale are set to pay a tax of 21% on net investment income if the proposal is enacted.
Yale’s endowment saw a 5.7% investment return, or US$2.3 billion in gains, across the year ending June 2024. This is the second-lowest return among the eight Ivy League universities.
The endowment’s value rose to US$41.4 billion last year. Over the decade ending June 2024, the endowment’s investment return was 9.5% per annum, with the university saying it had spent $14.3 billion in that time.
The university held more than US$10 billion in leveraged buyouts, and another $10 billion in venture capital funds last year.
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