Harvard’s Endowment Returns 7.3% for the 2020 Fiscal Year

Harvard University’s endowment returned 7.3% for the 2020 fiscal year ending in June after a strong market rebound offset losses from the March-April sell-off, bringing the endowment to $41.9 billion.

The returns mark an improvement for the nation’s largest university endowment, which ended last fiscal year with $40.9 billion in assets after returning 6.5%, according to a note Tuesday from N.P. “Narv” Narvekar, chief executive at Harvard Management Company, the investment arm overseeing the endowment. The fund will release its financial report next month.

Other schools have also recently reported their year-end numbers. Dartmouth recently posted 7.6% returns, the Massachusetts Institute of Technology (MIT) reported 8.3%, the University of Texas/Texas A&M earned 9.5%, and the University of Virginia (UVA) posted 5.3%.

Like many other schools, Harvard is contending with projected revenue losses and budget shortfalls from the pandemic. The university president said in a letter that the strong performance of the fund helped make an extra $20 million in funds available to the university’s schools.

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Still, the school cautioned it may not be enough to blunt the financial impact of the pandemic, which already caused the institution to cut discretionary spending and freeze salaries. In June, Harvard offered several voluntary workforce programs, as well as early retirement packages to about 700 workers.

“Every part of Harvard has felt, or will feel, the impact of either declining or reallocated resources,” Thomas J. Hollister, the university’s vice president for finance and chief financial officer (CFO), told the Harvard Gazette last week.

The strong fiscal 2020 year returns may also open the school to further criticism from those who say the endowment should better support the institution during times of great distress.

Early on in the pandemic, Harvard and other universities were sharply criticized by the public for considering federal stimulus checks lawmakers argued could go to schools with much smaller endowments.

The school is already a lightning rod for censure from student activists who criticize exposure to controversial investments, such as gun and gas stocks. Harvard recently adopted a net-zero carbon emissions goal for 2050.

Harvard Adopts Goal for ‘Net-Zero’ Greenhouse Gas Emissions by 2050

Harvard, Penn Endowments Return 6.5% Each, Duke Returns 6.9%

Tags: Coronavirus, COVID-19, Endowments, Harvard, Harvard University, revenue shortfall, University

A Florida police and firefighter pension fund has filed a class action securities lawsuit against chipmaker Intel and some of its top executives for allegedly lying about the production status of its new seven-nanometer technology.

The lawsuit, brought by the Hallandale Beach Police Officers’ and Firefighters’ Personnel Retirement Trust, alleges that Intel, along with CEO Robert Swan, Chief Financial Officer (CFO) George Davis, and Chief Engineering Officer Venkata Renduchintala, falsely assured investors that the company was making “good progress” on its first seven-nanometer product, and was on track to launch it by late 2021. It also alleges Intel failed to disclose material adverse facts about Intel’s business, operations, and prospects, while touting its in-house manufacturing as superior to its competitors.

The lawsuit accuses Intel of intentionally deceiving the investing public, and causing investors to purchase Intel common stock at artificially inflated prices. It also alleges the defendants used “devices, schemes, and artifices” to defraud and to “maintain artificially high market prices for Intel common stock.” The class period is from Oct. 25, 2019, to July 23, 2020.

According to the lawsuit, Intel’s stock troubles began on June 11 of this year when Jim Keller, whom Intel hired in 2018 to head up its chip engineering efforts, abruptly resigned. Intel also announced leadership changes within its Technology, Systems Architecture and Client Group, which is responsible for engineering and manufacturing Intel’s semiconductor chips, including its seven-nanometer technology. The lawsuit says the news caused Intel’s stock price to drop 6.5% to $59.70 per share from $63.87 per share.

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“Despite Keller’s departure, Intel reassured investors that its chip engineering and manufacturing group remained strong and that development of the seven-nanometer chip was on schedule,” according to the lawsuit.

Then, on July 23, Intel reported in its second quarter earnings report that production of its seven-nanometer chips was 12 months behind schedule, according to the lawsuit. The company attributed the delay to “the yield of Intel’s 7nm process, which, based on recent data, is now trending approximately 12 months behind the company’s internal target.”

The lawsuit says Swan announced that because of the production problems, Intel had established plans to outsource chip production to a third-party, which was “a strategy Intel had long opposed, and which would erase one of the company’s purported competitive advantages.” The lawsuit claims that as a result of the disclosures, Intel’s stock price fell 16.2% to $50.59 per share from $60.40 per share.

“As a result of defendants’ wrongful acts and omissions, and the precipitous decline in the market value of the company’s common stock,” said the lawsuit, “plaintiff and other class members have suffered significant losses and damages.”

Intel did not respond to a request for a comment.