ouch. harvard loses $8 billion (and counting)

In a sign of the economic times, Harvard has sent a letter to its deans saying that the university’s $36.9 billion endowment fund lost 22 percent of its value in the last four months and could decline as much as 30 percent by the end of the fiscal year on June 30.

Normally Harvard reports on the endowment’s performance once a year, but the letter signed by the university president Drew Faust and the executive vice president Edward C. Forst, cited the “current extraordinary circumstances” as the rationale for providing interim report.

Harvard depends on its endowment for about 35 percent of its operating budget and some of its schools rely on endowment income to cover more than 50 percent of their expenses. As a result, the letter noted that the endowment’s performance would have a significant impact on budgets. The 22 percent decline so far does not, the letter said, capture the full extent of losses because some investments are harder to value and are only valued periodically.