Yale University Investments Office Harvard Case Solution & Analysis

Yale University Investments Office Case Study Solution

it has been analyzed that large part of university’s endowments are used for other purposes than investment such as scholarship, grants for needy students, covering up university’s operating expenses, facilitating teachers and many others.(Merton, 1993)Yale University is also spending two-third of its investment to facilitate university and one-third of its endowments amount is used for investment purpose, as the endowments are not only for current students or short term, but also for long term purposes such as facilitating university and their students in future.

Comparing endowments investment of Yale University from Harvard University, it has been examined that Harvard University had fully owned a subsidiary company, named as Harvard Management Company, which manages the endowments received to university and to use them at appropriate purposes. Under HMC, a different approach is used by the company in order to sustain its investment for long term. This approach includes ESG integration, in which Environmental, Social and Governance factors are incorporated that helps the company to manage selection, appointment and monitoring of investments. In addition, the company list equity active ownership, under which the shareholders voting rights of clients are exercised. Lastly, Collaboration is done under which the company works with local investors and endowments in order to develop sustainable investments. (Corporation, 2017)On the other hand, Yale University has been more investing in Asset allocation and reducing its dependence on marketable securities. The investment of university is managed by its department, named as Yale Investment office.(Office, 2015)

As a result, it has been concluded that asset allocation by Yale University is not unconventional as most of the universities spend their endowments to make long term investments.

How has the Investment Office decided when to make private equity investments? What explains the differences between the strategies in private equity with that in other asset classes?

The company hired new investment manager in 1985, who tends to work upon its principles. He always wanted to be different and take risks for being unique. Moreover, he also believes strongly in equity, whether it is public or provided, rather than other assets classes. Investment in private equity is facilitating company with higher return than other colleges. Moreover, investment in private equity also providing better results than other endowments investments. Investment in private equity becomes consistent with its investment philosophy as long term relationship of investment office has been developed with premium organizations. In addition, the investment in private equity investments acts as value added approach of investing.

The company has planned to stay committed with private equity as the company is enjoying the historical success from these investments. In addition, this investment also delivers higher results compared to other investment types. Furthermore, the strong relationships have been developed between company and key managers, as this relationship serves the Yale University a competitive advantage. Also, the company has complete knowledge of process followed in private equity process, which helps the Investment Office to manage their money in better way, such as tracking their investment in hedging their money. Lastly, this investment is facilitating company with additional benefits such as higher return in favorable times.

How has the Investment Office made international private equity investments? What explains the differences between the performance of its international and domestic private equity investments?

It has been analyzed by the company that investment in private equity is giving more results in emerging economies such as Russia and Asia, rather than developed countries like United States, as they are striving to make their economy better.Moreover, the principle of Investment Office says to diversify its investment in order to get better results, therefore, in order to diversify its investments, Investment office chosen foreign equity.

 

Yale University Investments Office Harvard Case Solution & Analysis

 

 

There were many differences possess by the company to manage domestic and foreign private equity investments. As Investment office holds strong relationships with key managers, however, in foreign investments, the investment office is confused to trust any organization as there is no authentic information. Moreover, higher economic and political risks would have to be faced by the investment office in order to deal internationally. Lastly, the investment office of Yale University has higher experience to operate domestically, rather managing its investments internationally which increases the company’s investment risks.........................

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