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Yale’s Endowment Selling Private Equity Stakes as Trump Targets Ivies

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Yale’s Endowment Selling Private Equity Stakes as Trump Targets Ivies

Yale University’s famed endowment has been trying to offload one of the largest portfolios of private equity investments ever in a single sale, a move that reflects the pressures on both Wall Street and higher education under the Trump administration.

The Ivy League school has sought buyers for up to $6 billion in stakes in private equity and venture funds, according to three people briefed on the sales process, amid uncertainty about its federal funding and the reality that many of these investments have not delivered the outsize returns that Yale expected.

Yale is now close to completing a sale of roughly $3 billion of the portfolio and is selling the assets at a slight discount, one of the people said.

“This is a big deal,” said Sandeep Dahiya, a professor of finance at Georgetown University who has conducted research on the performance of endowments. “The investor that was the lead architect of investing in the private equity markets is pulling in its horns.”

For decades, Yale has been regarded as a pioneer for shifting its investments away from stocks and bonds into longer-term holdings managed by private equity and venture capital firms. But last year, Yale’s $41 billion endowment generated returns of just 5.7 percent, underperforming the S&P 500 and other major indexes. Yale said its 10-year return averaged 9.5 percent annually.

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Private equity investments typically generate cash for endowments and other investors after they sell or take public the companies in which they have invested. But lately, private equity and venture firms, which make up about half of Yale’s endowment, have struggled to sell their stakes in companies and return cash to investors. That has driven down returns.

Yale’s quest to exit investments in both well-known firms like Bain Capital and lesser-known ones like Golden Gate Capital, Clayton Dubilier & Rice and Insight Partners is a sharp U-turn for an endowment that has long proselytized the value of private equity and other long-term investments.

Knowing that some stakes would be harder to sell than others, Yale’s bankers offered potential bidders two separate lists of funds: “core” funds, the ones they most wanted to sell, and “sweeteners,” the better-performing ones, according to two of the people briefed on the sale.

While buyers would receive only a small discount of about 5 percent on the private equity stakes, Yale willingness to sell assets that were once highly desirable at less than full value reflects the industry’s challenges.

The sale comes at a critical juncture for universities. While President Trump has spared Yale the kind of punitive funding cuts he has leveled against other Ivy League schools such as Harvard, Yale is grappling with decreases in federal research funding that have hit higher education broadly. Republicans in Congress have also proposed steep tax increases on endowments.

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Yale is on track to spend roughly $2.1 billion from its endowment in 2025, which accounts for just over one-third of its annual budget.

In a statement provided to The New York Times, a representative for the Yale endowment acknowledged the sale, but called private equity “a core element of our investment strategy.” The statement added, “We are not reducing our long-term target to private equity.” The university said it was also looking to invest in other private equity firms.

Yale’s bankers tried to keep the process discreet by giving the sale the code name Project Gatsby. (Two of the main characters in F. Scott Fitzgerald’s novel set in the roaring 1920s went to Yale.) But Yale’s move is widely viewed on Wall Street as a harbinger.

At least two other large universities are preparing to sell some private equity assets, and dozens of U.S. and Asian pension funds are also looking at exits.

Lawrence Siegel, a former director of research at the Ford Foundation, called Yale’s move “a wake-up call” for investors.

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“It’s also Yale trying to get out before everyone else,” Mr. Siegel said.

When David Swensen, a former Lehman Brothers banker, joined Yale as its chief investment officer in 1985, the university’s endowment was valued at about $1.3 billion. (Harvard’s had $2.7 billion.)

During 2021, the year that Mr. Swensen died, Yale’s endowment had swelled to $42.3 billion, behind Harvard but billions ahead of almost every other university endowment.

To achieve that, Mr. Swensen shifted Yale’s investments from a traditional portfolio of 60 percent stocks and 40 percent bonds. After getting to know fund managers in private equity and venture firms, Mr. Swensen moved a relatively large slug of Yale’s endowment into long-term assets, often investing in those funds for decades.

Other universities watched Yale’s returns and started to follow the Swensen Model, as it came to be known.

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Yale’s early affection for private equity provided the perfect advertisement for an industry looking to attract new investors.

“Do you want to be smart like Yale?” said Ludovic Phalippou, an economist at the University of Oxford, in describing the pitch.

University endowments now invest an average of about 17.1 percent of assets in private equity funds, according to studies by the National Association of College and University Business Officers. That’s up from just 5.4 percent in 2007 before the financial crisis.

Universities and private equity firms have developed a symbiotic relationship. Endowments typically pay private equity firms roughly 2 percent of the money they manage and 20 percent of the profits they generate.

Those fees have helped mint slews of billionaires, many of whom sit on university boards and make large donations to the schools.

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Yale’s senior trustee, for example, Joshua Bekenstein, has worked at Bain Capital since its inception in 1984, four years after he graduated from Yale. The Boston-based firm was one of the earliest to jump into the buyout business. It scooped up companies like Dunkin’ Donuts, Clear Channel Communications and Gymboree, added debt and then tried to sell them for a profit. Gymboree, a children’s clothing retailer, filed for bankruptcy seven years after Bain bought it.

Bain now manages $185 billion, including at least roughly $1 billion for Yale.

For more than a decade after the financial crisis, U.S. private equity firms reliably generated average returns, on paper, in the mid- to high teens, according to the data provider PitchBook. But the firms generated average returns below 10 percent in 2022 and 2023, and just over 10 percent in 2024.

Another challenge: Deal making has been slow for several years, and private equity firms have had difficulty selling stakes in companies and returning cash to investors at levels reached in previous years. Despite optimism that the second Trump administration would spur a deal-making resurgence, the volatility around tariffs has made companies wary.

In 2024, the firms returned about 15 percent of the value of their funds to investors in cash, compared with between 25 and 35 percent in prior years, PitchBook data shows.

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The winnowing returns come after private equity firms, from 2021 to 2024, raised record sums from pensions, endowments and sovereign wealth funds, PitchBook data shows.

Steven Meier, chief investment officer for the New York City Retirement System, acknowledged that returns for private equity “haven’t been great.”

The system, which manages a $280 billion investment portfolio for the pensions of teachers, firefighters and other public employees, just sold $5 billion of its stakes in private equity firms. Mr. Meier said the city would continue investing in private equity but was looking to pay lower fees.

He added that the funds’ recent returns to pensions and endowments had also been “disappointing.”

When Yale’s bankers at Evercore Partners began shopping the endowment’s private equity portfolio in April, they didn’t disclose the seller’s identity.

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But they left a clue: They called the sale Project Gatsby.

Bidders were asked to select funds from a combination of the “sweetener” and the “core” pool of assets and to name their price by May 6, with Yale’s bankers aiming for a June 30 closing, according to sales documents viewed by The Times.

Some details of Yale’s sale were reported earlier by Secondaries Investor and Bloomberg.

The biggest single position that Yale has been shopping is a roughly $600 million stake in a 2007 fund run by Golden Gate Capital, a San Francisco-based private equity firm known mostly for investing in retailers like Ann Taylor, Eddie Bauer and PacSun. Two people familiar with the sale said Yale did not expect to sell the entire stake.

The Golden Gate stake was marketed as part of the core portfolio, among the assets that the bankers most wanted to sell.

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Evercore’s bankers also offered stakes in Insight Partners and General Catalyst. At least one stake that was labeled a “sweetener,” Clayton, Dubilier & Rice, was not expected to be sold because Yale has been able to get the price that it wanted on other stakes, according to two people familiar with the sale.

Yale has also been offering to sell nine funds managed by Bain Capital, with a total value of about $1 billion. A person familiar with the deal said the school was on the verge of selling about $500 million worth of those Bain stakes.

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U.S. Targets Iran’s Missile and Drone Program With Sanctions

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U.S. Targets Iran’s Missile and Drone Program With Sanctions

The United States on Friday announced a flurry of new sanctions intended to increase pressure on Iran’s economy, targeting people and companies in China and Hong Kong that have been helping the Iranian military gain access to supplies and war equipment.

The sanctions came ahead of a major summit between President Trump and China’s leader, Xi Jinping, in Beijing next week. China’s support for Iran has become a flashpoint with the Trump administration, which has been trying to compel independent Chinese refineries to stop purchasing Iranian oil.

China is Iran’s biggest buyer of oil, and the Trump administration has said that it is sponsoring terrorism by propping up the Iranian economy.

The new sanctions are aimed at Iran’s military industrial supply chain, and are intended to make it harder for Iran to secure access to the material it needs to build drones and missiles. In addition to China, the sanctions also target people and companies based in Belarus and the United Arab Emirates.

“Under President Trump’s decisive leadership, we will continue to act to keep America safe and target foreign individuals and companies providing Iran’s military with weapons for use against U.S. forces,” Treasury Secretary Scott Bessent said in a statement.

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The Trump administration has been looking for ways to squeeze Iran’s economy and pressure the Iranian government to reopen the Strait of Hormuz, a conduit for the flow of global oil. Oil tankers have had sporadic access to the critical waterway since the war started earlier this year, and the United States and Iran have been fighting over who should control it.

U.S. warships that have been trying to transit the strait have been attacked by Iranian forces. The United States on Friday fired on and disabled two Iranian-flagged oil tankers as they tried to reach an Iranian port.

The Treasury Department has also imposed sanctions on the Chinese “teapot” refineries this month. The independent refineries are major purchasers of Iranian oil. But China invoked a domestic policy ordering its companies to disregard the sanctions.

Mr. Bessent said earlier this week that he expected Mr. Trump to urge Mr. Xi to use the country’s leverage over Iran to pressure it to allow oil cargo to travel.

“Let’s see if China — let’s see them step up with some diplomacy and get the Iranians to open the strait,” Mr. Bessent told Fox News on Monday.

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General Motors to pay $12.5 million to settle claims that it illegally sold California driver data

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General Motors to pay .5 million to settle claims that it illegally sold California driver data

General Motors has agreed to pay $12.5 million dollars to settle claims that the automaker illegally sold location and driving data of hundreds of thousands of Californians, state officials said Friday.

The settlement is an example of how automakers are facing more scrutiny over allegations that they share driver data with the insurance industry, influencing how much people pay for coverage. California, though, has a law that bars insurers from using driving data to set rates.

“If we get word that a company is illegally collecting, storing or selling consumer data, we won’t hesitate to look under the hood and hold them accountable to the law,” California Atty. Gen. Rob Bonta said in a news conference.

The settlement is the largest California Consumer Privacy Act penalty in the state’s history, Bonta said.

The act gives California consumers the right to request that businesses disclose what data they collect. They can also opt out of the sharing or sale of their personal information and request that businesses delete their data.

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Investigators found that from 2020 to 2024, GM sold driver data, including names, contact information, location data and driving behavior data, to data brokers Verisk Analytics Inc. and LexisNexis Risk Solutions. The data came from a driver’s use of OnStar, which is owned by GM and provides roadside assistance, navigation and other services.

GM said the agreement addresses a product called OnStar Smart Driver that the company discontinued in 2024. The product was meant to help improve people’s driving but faced privacy concerns from consumers. In 2024, GM also ended its partnership with the two data brokers and said it would enhance privacy controls.

“Vehicle connectivity is central to a modern and safe driving experience, which is why we’re committed to being clear and transparent with our customers about our practices and the choices and control they have over their information,” a GM spokesperson said in a statement.

Various district attorneys throughout the state, including in Los Angeles and San Francisco, were involved in the investigation and settlement.

Technology has been playing a bigger role in the auto industry, but the data collected from drivers can reveal personal information about people’s daily habits, including where they drop off their kids and doctor visits.

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The California Privacy Protection Agency in 2023 started investigating the privacy practices of connected cars. As the state was looking into the automakers, the New York Times reported in 2024 that GM was sharing consumer driving behavior with insurance companies. Nationwide, GM reportedly made roughly $20 million from selling data to Verisk and LexisNexis.

The state’s privacy protection agency has taken action against other automakers before. Ford Motor Company was fined $375,703 in March and Honda was fined $632,500 in 2025 for privacy violations.

Under the GM settlement, which still needs court approval, the automaker would delete any driving data the company kept within 180 days and request that the two data brokers do the same. They would also stop selling driving data to consumer reporting agencies for five years and develop a privacy program that includes assessing and mitigating the risks of data collected from OnStar.

California’s settlement with GM came after the Federal Trade Commission in 2025 also took action against the automaker and OnStar for its privacy practices, barring them from disclosing location and driver behavior data to consumer reporting agencies for five years.

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Trump’s Latest Tariff Setback Looms Over China Talks

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Trump’s Latest Tariff Setback Looms Over China Talks

A day after a federal court ruled against President Trump’s latest global tariffs, his administration returned to the drawing board on Friday, trying to preserve its powers to wage economic warfare in time for high-stakes trade talks with China.

The latest legal blow concerned the 10 percent tariff that Mr. Trump imposed in late February on nearly all U.S. imports. The president unveiled that policy as a sort of temporary fix, after the Supreme Court tossed out his initial duties, but a panel of judges once again found that the White House had run afoul of the law.

The result was a familiar set of headaches for Mr. Trump, who has tried repeatedly — and with mixed success — to stretch his authority to tax imports without the express permission of Congress. By Friday, one of the president’s top aides signaled that an appeal was imminent, echoing the president, who told reporters shortly after the ruling that he would simply “do it a different way.”

Technically, the Court of International Trade only declared the president’s across-the-board, 10 percent tariff to be illegal. Otherwise, it did not issue an order forcing the government to stop collecting it from all importers, at least for now. Still, the outcome marked both a political and legal setback for Mr. Trump, who had spent much of the week issuing trade threats against Europe and preparing for talks in China.

Tariffs are expected to be a major topic on the agenda when Mr. Trump travels to Beijing to meet next week with his counterpart, Xi Jinping. Trade experts said the court decision could undercut the president’s leverage. Eswar Prasad, a professor of economics at Cornell University, said the ruling “severely handicapped” the administration’s ability to employ tariffs against foreign nations, leaving Mr. Trump with a “much weaker bargaining hand” when it comes to China.

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“Any threats by Trump to hit China with broader and higher tariffs if Xi doesn’t bend to his will on economic and geopolitical matters now seem like empty bluster rather than credible ultimatums,” he said.

One of the president’s top trade advisers, Jamieson Greer, appeared to brush aside some of those concerns on Friday. During an interview on Fox Business, he criticized the court for ruling against the White House, claiming that some of the judges on the panel were “apparently just hellbent on importing more from China.”

Mr. Greer, who defended the president’s use of trade powers, added that the administration is “confident on appeal we’ll be successful.”

At the heart of the matter is Mr. Trump’s decision to invoke a trade power that no president had ever used. Known as Section 122 of the Trade Act of 1974, it permits the president to impose tariffs up to 15 percent for 150 days, but only in response to strict conditions, including a “balance of payments” crisis.

The term itself reflects a bygone concern from the time the law was adopted, when the U.S. dollar was pegged to gold, creating unique economic risks. But the Trump administration sought to argue that the law still applied today, pointing in part to the country’s persistent trade deficit, a different measurement, which reflects the gap between U.S. imports and exports.

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In the end, a majority of judges on the Court of International Trade found the argument unpersuasive and sided with small businesses and states that had sued. It marked the second time that some of those challengers had prevailed against Mr. Trump, after they convinced the Supreme Court to invalidate his earlier use of emergency powers to impose withering tariffs.

The new decision raised the odds that the administration could soon have to pay back the billions of dollars collected from its 10 percent tariff, on top of the $166 billion that the government already owes to U.S. importers from its last legal defeat. But the fight appeared far from over, and much remained uncertain by Friday — not just for American businesses, which paid the cost to import goods, but for the Trump administration itself.

“President Trump has lawfully used the tariff authorities granted to him by Congress to address our balance of payments crisis,” Kush Desai, a White House spokesman, said in a statement. “The Trump administration is reviewing legal options and maintains confidence in ultimately prevailing.”

For one thing, the court only appeared to bar the collection of the president’s 10 percent tariff for some of the plaintiffs that sued, many legal experts said. That raised the odds that droves of U.S. businesses could soon mobilize and “file a court case” of their own asking for similar relief, said Ted Murphy, a top trade lawyer at the law firm Sidley Austin. He added that he also expected the trade court to pause implementation of its order pending an appeal.

The timing is important to Mr. Trump, who had always envisioned his across-the-board tariff as a stopgap that would allow the government time to prepare a set of more lasting rates using another set of authorities, known as Section 301. But that process was widely expected to take months, since the law requires the government to conduct investigations into other countries’ trade practices before Mr. Trump can apply new duties.

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Those inquiries targeting dozens of countries are well underway, and the president at times has suggested the final rates could be set at new highs. Some experts believe the tariffs imposed using Section 301 could be more legally durable, though the administration could still face lawsuits over his aggressive use of the law.

Michael Lowell, the chair of the global regulatory enforcement group at the law firm Reed Smith, said the White House probably would not have to worry about “a broad attack on that authority.” But, he said, the courts had recently drawn something of a line in the sand, suggesting they would be “very skeptical of the administration looking to the past and finding and repurposing” other powers to advance its trade agenda.

Unlike the president’s other trade gambits, he has successfully applied tariffs in the past using Section 301, including on China. That left some analysts to conclude that Mr. Trump, while blemished, would still retain some leverage ahead of his trip to Beijing next week.

“Unless they have amnesia, China should remember quite vividly how during Trump’s first term, the U.S. imposed multiple rounds of tariffs under Section 301 on China during negotiations,” said Sarah Schuman, a former U.S. trade official who is now managing director at Beacon Global Strategies.

The administration still had multiple options “to increase tariffs on China in pretty short order,” she added.

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Mr. Trump’s trip to China had been scheduled for April, but was delayed because of the war in Iran. U.S. officials have said their goals for the visit include establishing a “board of trade,” which would oversee commerce between the countries in an effort to balance trade and reduce the U.S. trade deficit with China

On Friday, Mr. Greer sketched out a long list of concerns that the administration planned to raise with its Chinese counterparts, from its adherence to past purchase agreements to its approach to artificial intelligence.

“There’s not really a situation where we go, we get China to change the way they govern, the way they manage their economy; that’s all baked into their system,” he said. “But I think there is a world where we find out where we can optimize trade between China and the U.S. to achieve more balance.”

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