One she might not have anticipated was the intense pressure caused by the Allston expansion, according to one person with knowledge of the endowment. Several years ago, the university had envisioned an ambitious capital expansion program stretching for more than a decade. Lawrence H. Summers, then Harvard’s president, had raised the possibility of locking in interest rates that appeared to be at historic lows, a plan the university adopted, said several people familiar with the endowment.
All went well at first. But in the second half of last year, interest rates plummeted, and Harvard turned to the endowment to meet hefty collateral calls, which could rise to $1 billion if rates remain weak, according to a person with knowledge of the university. According to a statement Friday from James R. Rothenberg, treasurer of the university, Harvard has taken a series of steps to reduce the risk associated with the transaction.
Endowment Director Is on Harvard’s Hot Seat - NYTimes.com
Posted by Harry Mattison on 2/21/2009 07:22:00 AM