Just as Harvard has seen its finances decimated in the downturn, so to have all the little Junior Harvards, the tony prep schools where the rich send their kids for more than what most people pay for college.
Moody’s has downgraded The Spence School to A1, as the ratings agency is not happy with its concentration of funds:
Bloomberg: Moody’s said last July that about 28 per cent of Spence’s endowment, or $25.6 million, was in Juggernaut fund, run by Stanley Druckenmiller, a top-performing manager and husband of a former trustee. The proportion of alternative investments in the endowment climbed as the Upper East Side girls’ school sold publicly traded securities to help finance the purchase of a nearby building, Moody’s said last month.
The downgrade reflects concern that Spence’s “extremely concentrated investment portfolio exposes the school to significant risk,” according to the May report. New York-based Moody’s said it wasn’t evaluating the strategy or returns of a specific fund. While the rating reduction won’t affect interest on Spence’s fixed-rate bonds, it may make future borrowing more expensive.
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