{"text":[[{"start":7.28,"text":"Harvard University’s endowment has posted one of its highest annual returns on record, buoyed by a rally in US stocks and venture capital investments in high-flying private technology companies such as SpaceX."}],[{"start":19.32,"text":"The Ivy League university said on Thursday that its endowment returned 27.1 per cent in the 12 months to June 30, helping boost its total assets by almost a fifth to $68bn. The returns helped partially soften the blow of steep research funding cuts and tax increases imposed by the Trump administration as it has accused Harvard of antisemitism, forcing it to cut salary expenses and freeze hiring."}],[{"start":45.2,"text":"NP “Narv” Narvekar, chief executive of Harvard Management Company, attributed the “exceptional” performance primarily to venture capital, public equities and hedge funds."}],[{"start":55.12,"text":"HMC’s robust performance reflects a broader rebound among leading US university endowments after several years of disappointing returns relative to public equity markets."}],[{"start":65.2,"text":"“Harvard’s risk-on mindset really resulted in a home run this year,” said Philip Casey, founder of Institutional LPs, a tech company that works with endowments."}],[{"start":74.96,"text":"HMC’s private equity holdings, particularly venture capital, had weighed on overall returns in recent years, even as the endowment increased its exposure to the asset class."}],[{"start":85.46,"text":"Private equity accounted for 46 per cent of Harvard’s portfolio, up from 34 per cent five years ago, while its allocation to venture capital and growth equity, which focus on young and fast-growing companies, rose to 31 per cent from 24 per cent a year earlier."}],[{"start":101.56,"text":"The strategy paid off this year as soaring valuations of private tech companies boosted the value of its venture capital investments. HMC held about $2.2bn worth of SpaceX shares as of June 30, its largest-ever single public equity holding, generating significant investment gains, according to regulatory filings and people familiar with the matter."}],[{"start":122.32,"text":"“Private investments were a meaningful contributor to performance in FY26,” said Narvekar."}],[{"start":127.72,"text":"But the strong performance has raised questions about the sustainability of returns, given HMC’s heavy exposure to private equity and growing concerns over the soaring venture capital valuations of AI start-ups."}],[{"start":140.16,"text":"“Is the AI boom Harvard’s Achilles heel, and is this very concentrated bet in venture Harvard’s Achilles heel?” Casey said. “They had the home run year, but the tides may turn. And these types of bets can turn on a dime.”"}],[{"start":156.32,"text":"Narvekar also struck a cautious note about the outlook for investment returns."}],[{"start":161.96,"text":"“Outsized returns can sometimes portend subdued, or even negative, returns in the near term.”"}],[{"start":167.92,"text":"Despite the bumper investment returns, Harvard’s chief financial officer Ritu Kalra and treasurer Timothy Barakett said in their annual financial review that fiscal year 2026 had put the university’s “financial resilience to an extraordinary test”, amid cuts to federal research funding by President Donald Trump’s administration and a sharp increase in taxes on endowment investment income."}],[{"start":192.96,"text":"The federal tax on Harvard’s endowment investment income rose from 1.4 per cent to 8 per cent on July 1 2026, with the estimated annual cost equivalent to almost two-fifths of the university’s spending on student financial aid. Kalra and Barakett said the tax would typically cost about $300mn a year but could be “several times larger” in a year of exceptionally strong investment returns."}],[{"start":218.92,"text":"“The tax will redirect a meaningful share of investment gains that would otherwise support teaching, research, financial aid and other purposes designated by donors,” said Narvekar."}],[{"start":229.64,"text":"Meanwhile, the Ivy League university has faced mounting financial pressure from the Trump administration, which has targeted Harvard over allegations of antisemitism on campus and disputes over university governance and academic policies."}],[{"start":244.28,"text":"Harvard’s federally sponsored research activity fell 32.1 per cent, reflecting fewer new grants, slower spending on existing awards and disruptions following the US government’s suspension and termination of federal funding. The university cut salary expenses by $104mn, or 3.8 per cent, amid a hiring freeze, attrition and restructuring."}],[{"start":266.4,"text":"“We would like to tell you that the uncertainty of the past two years is behind us,” said Kalra and Barakett. “It is not.”"}],[{"start":274.04,"text":"HMC’s strong performance would provide limited relief to the university’s financial pressures, the executives cautioned, as much of the endowment is subject to donor restrictions."}],[{"start":284.9,"text":"Strong returns “neither create immediate flexible resources nor, on their own, resolve structural gaps between recurring revenues and expenses”, they said."}],[{"start":292.52,"text":"This article has been amended to reflect that the annual return on Harvard’s endowment to June 30 2026 was one of its highest on record, not the second-highest ever"}],[{"start":307.6,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1792109913_2313.mp3"}