Stanford Turns to the Market after Endowment Shrinkage

October 12, 2009 ( - Faced with a 27% plunge in the value of its $12.6-billion portfolio as of August 31, and in an effort raise its liquidity levels, Stanford University has put on the market $1 billion in assets, including venture capital investments.

Reuters reported that investment bank Cogent Partners is coordinating a sale of private equity; venture capital; timber, oil, and gas; and real estate assets with bids due at month’s end. According to the news account, the university’s chief investment officer contends Stanford is not a distressed seller and is able to wait out a delay with the goal of generating more revenue.

“…we’re quite willing to not do it if we don’t get terms we are comfortable with,” John Powers, chief executive officer of Stanford Management Co., told Reuters. “We had very deliberately chosen to wait until the markets had recovered somewhat to explore if this made sense.”

Powers added that Stanford has $800 million of borrowed money, stored in short-term holdings that it has yet to tap into.

“If in fact we get a level of interest that we think merits a response, I would expect (the sale) to move relatively briskly,” he told Reuters. He said it could be completed by December or January.

Stanford is cutting 500 jobs and scaling back budgets this year because of the asset decline in its endowment, Reuters reported.

Other national-level universities such as Harvard and Yale have been having similar asset woes with their endowments (see Yale Follows Harvard with Deep Endowment Losses ).