It was a mystery.
In the first few quarterly reports this year, Yale’s $17 billion endowment fund was reporting that it had $60 billion of stock investments. This quarter it reported that its holding in publicly traded stock dropped down to just $5 billion.
How can a $17 billion endowment hold $60 billion of stock? Was it employing huge leverage? And why was Yale allocating such a large portion of its portfolio to stocks?
Even the $5 billion number seemed awfully large.
As it turns out, Yale was just misreporting its holdings.
In its 3rd quarter 13F report, Yale posted a total investment of “$5,209,720 (X$1,000)” or $5.2 billion. Back in June Yale reported that it had $60,846,511 (X$1,000) or $60.8 billion. In March, Yale reported it held $62 billion of stock.
The Business Insider checked the numbers with Yale’s general counsel and discovered Yale had simply attached too many zeros to its holdings when it filed with the SEC. Yale had accidentally reported the full amount of the holdings and then attached the one thousand multiplier to them, overstating its holdings by a factor of 1000.
“There is indeed a defect in our reporting program which caused the “TOTAL” figures on the last three quarterly reports (for the quarters ending March 31, 2009, June 30, 2009 and September 30, 2009) to be stated to the dollar, rather than being stated in thousands of dollars which is the standard format for the Form 13F,” said Kenneth Miller, the associate general counsel for Yale.
The correct totals for Yale’s disclosed stock holdings are $62,691,097 or $62,691 (X$1,000) in March, $60,846,511 or $60,847 X ($1,000) in June, and $5,209,719 or $5,210 (X$1,000) yesterday.
So what really happened is that Yale went from holding $60.8 million of stock to just $5.3 million. This is still a hefty move out of stock by Yale’s endowment fund. But nothing close to a sale or loss of $55 billion.
The 13F report for the quarter ending June 30, 2009 also had a second formatting error that caused the Value of each of the 10 13(f) securities reported on the Form 13F for that date to be overstated by a factor of 10.
13F reports frequently have errors, but this one rings sadly of Yale’s nostalgia for the days before it sank to around $17 billion after reporting losses of 25% last quarter.
But the only Ivies that didn’t report steep losses were Penn and Columbia, and Yale’s is still second to Harvard’s largest endowment fund in the country. Yale also just dipped its toes into investing in banks.