Yale University to sell Portfolio on PE Secondaries Market

Yale University is said to be considering a proposal to sell a portfolio on the private equity secondaries market, according to a report published in local English newspaper The Yale Daily News on Tuesday.

The Yale University did not specify a target size for the sale. However, the transaction could total up to $6 billion in value, according to Secondaries Investor, a website providing industry insights for investors. In the 2024 fiscal year, the Yale endowment grew to a total of $41.4 billion.

By selling on the secondaries market, Yale would be able to convert its private equity assets into liquid assets that are more readily spendable.

“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 wrote in an email to the daily.

Evercore is an independent investment bank that provides services such as financial research, institutional asset management and private equity investing.

According to Secondaries Investor, this is Yale’s first known sale in the secondaries market, which allows investors to buy existing assets from other investors rather than directly purchasing stakes from private companies.

Yale’s investment strategy prioritises the diversification of assets away from the traditional US equities and bonds and into alternative investments such as private equity, venture capital, hedge funds and real estate. Last year, the University reported that roughly 95% of its endowment is invested in these alternative assets.

“We remain committed to private equity investments as a major part of our investment program and continue to make new commitments to funds raised by our current investment managers. In addition, we continue to actively seek new relationships with private equity firms in the Endowment,” the spokesperson said.

Major Sale

Yale’s major portfolio sale comes after the University announced that its budget would be “far more constrained” for the 2026 fiscal year due to low endowment returns. While Yale’s 10-year investment return of 9.5% places it in second place among the eight Ivy League endowments, its short-term endowment performance has lagged behind.

For the past three fiscal years, Yale’s annual investment returns have not reached the 8.25% threshold needed to sustain the University’s current level of endowment spending.

Yale administrators also identified proposals from US President Donald Trump’s administration to increase endowment taxes and to cut federal funding for research as threats to Yale’s finances and reasons for reductions to spending.

Already, the University has announced cuts to spending on faculty raises, faculty and staff hiring, campus construction and other non-salary expenditures. Elihu Yale established Yale’s endowment in with a donation of $746.22 in 1718, the report said.