Harvard and Yale sell private equity stakes at a discount, potentially leading to significant gains

From Yahoo Finance: 2025-06-15 06:02:00

The secondary market for private equity stakes is thriving as top universities like Harvard and Yale sell off portions of their portfolios at a discount due to slow returns and economic turbulence.

Harvard and Yale are selling their private equity stakes to increase liquidity amidst concerns about opaque returns in the private equity world. Billionaire Bill Ackman believes these assets are overvalued, leading universities to sell at a discount.

Despite potential risks, universities like Yale continue to sell private equity holdings, with buyers willing to overpay and mark up investments, a process known as “NAV squeezing,” potentially resulting in significant gains for sellers.

While some critics compare NAV squeezing to a Ponzi scheme, it remains a common practice in the industry, allowing universities to potentially profit from selling their PE stakes at a discount to NAV.

Ultimately, universities may still come out ahead financially, even when selling private equity stakes at a discount, thanks to the complexities of the secondary market and the potential for significant gains through NAV squeezing.



Read more at Yahoo Finance: As Harvard’s and Yale’s private equity holdings go on sale, buyers can use this technique for 1,000% windfalls. ‘It makes your brain melt’