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Harvard University to sell $1.5 billion in private equity

Jane Mendillo
Jane Mendillo, Harvard Management Co.’s president and CEO

Harvard University is seeking to sell about $1.5 billion of holdings in private equity funds as it further cuts investments that contributed to record losses three years ago.

Harvard Management Co., which oversees the school's $32 billion endowment, plans to offer about $1 billion of stakes in predominantly U.S. buyout funds through UBS, and is already taking bids on about $500 million in energy investments through Cogent Partners, according to three people briefed on the deal, who declined to be identified because the information is private.

Jane Mendillo, CEO of Harvard Management, has been shrinking the endowment's private equity and real estate investments almost since she took over in July 2008 to free up cash and exit funds the school in Cambridge, Mass., no longer wanted. Harvard's commitments to buyout and real estate funds have dropped to $5 billion to $6 billion from $11 billion two years ago, she said in a September interview.

John Longbrake, a Harvard spokesman, declined to comment on the planned sale.

Private equity, the endowment's top-performing asset class in the decade through June 2008, gained 26% in the past fiscal year, falling short of targets. Over the decade ended June 2011, the endowment's best-performing asset class was fixed income.

Harvard's investments gained 21% in the 12 months ended June 30, increasing for the second straight year.