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#21048328 at 2024-06-19 05:52:01 (UTC+1)
Q Research General #25808: We're just getting Started Edition

>>21048325
Outsourcing Management of Endowments is The Name of The Game

Harvard's endowment is the largest in the country and will likely only get larger after tapping Blackstone's chief financial advisor, Michael S. Chae, who will become a member of the Harvard Management Company's (HMC) board of directors beginning on July 1, 2024. The board currently consists of 10 members which are responsible for managing Harvard's $50.7 billion endowment. HMC is led by CEO N.P. "Narv" Narvekar, who joined in 2016 after being CEO at Columbia University since 2002, and by 2017 launched a new strategy to outsource assets to external managers. Narvekar had carried out the same strategy at Columbia. Harvard began outsourcing management of most of its endowment by mid 2017. They laid off half of their investment staff and utilized the endowment's direct real-estate team as an external manager. In 2018, Harvard sold its portfolio of over 100 warehouses to Blackstone.

As far back as 2015, universities such as Yale, Harvard, University of Texas, Stanford, and Princeton were all spending more of their endowment on private equity fund managers than they were on their students. Yale, for example, paid $480 million to private equity fund managers while only spending $170 million on tuition assistance, fellowships and prizes on students in 2014. That following year, co-founder of Blackstone, Stephen A. Schwarzman, pledged $150 million to Yale for a new student center. This has become a concerning trend among colleges and universities.

Billionaires have been funding and steering university endowments for years. Between 2010 and 2020, The Bill & Melinda Gates Foundation granted over $11.6 billion to 471 universities and higher education institutions in 66 countries, with over 70% going to U.S. universities. The top five in order of funding were: University of Washington, John Hopkins University, Emory University, University of California, San Francisco, and the University of Oxford. Bill Gates is merely one example.

Outsourcing management of endowments isn't the only game in town. The plandemic brought on an onslaught of billions of dollars in outsourcing to for-profit companies to manage everything from online courses, enrollment and recruiting, tutors, research, manage IT, dorms, classrooms, labs, parking, and even student unions. Getting the big picture?

It's not just the private equity firms eating up these endowments. In 2020, the University of Illinois System invested almost $160 million of their endowment to become the first investor in BlackRock's new environmental, social and governance (ESG) strategy, which goes along with the UN's Sustainable Development Goals, furthering these agendas.

Location is Key: Satellite Campuses in D.C.

In addition to buying up real estate surrounding campuses, many colleges and universities are expanding their campuses to other cities as satellite campuses, with over 50 already in Washington D.C., the prime location they all seek. Millions of dollars are going into these expansions.

According to James Birkey, senior vice president for education at real estate company JLL, universities have established satellite campuses for a long time but "what is new is the competitive tenor of it." Birkey explains that "there are key institutions that are looking for very specific space in specific strategic places, and the economics are currently in their favor to find it."

In 2018, Arizona State University opened its new center just four blocks from the White House, and expanded to another nearby building the following year. Not long after, the University of Arizona acquired space just two blocks from the White House.

Just in 2023 alone, new outposts and expansions took place by Texas A&M, Purdue, Princeton, and Johns Hopkin's who spent $372 million to acquire the former Newseum building for its new Bloomberg Center.

The University of Southern California recently purchased an office building on Dupont Circle in Washington D.C. to convert to a satellite campus. USC President Carol L. Folt said, "the idea of creating a campus structure in D.C. came up pretty recently. It really came to fruition quickly."

Small private schools and large public schools all want the D.C. action, including New York University,

Middlebury College, Florida International University, the University of Pennsylvania, and Hillsdale College, just to name a few.

In order to accommodate all of these students, more housing will be needed, which means purchasing office buildings or other real estate to convert into student housing.

It goes without saying that D.C. Mayor Muriel Bowser is 100% for these satellite campuses and wants to expand university uses, reimagine the downtown, add a large tech hub and office to residential conversions, plus add an additional 15,000 residents downtown. …