Friedberg @ 00:56:20Inconclusive
economy
Within roughly 18 months of this July 4, 2025 episode (i.e., by early 2027), Harvard will face a severe budget shortfall that forces it to actively sell portions of its private equity portfolio, and those secondary sales will clear only at steep discounts of approximately 20–40% to reported net asset value.
Harvard's cooked, and I think this is really good for America... They can stall for probably another year and a half, but at some point they will not have the budget to sustain themselves, and they're going to get into a huge world of hurt. What they will have to do in order to finance their budget in probably 18 months is start to actively sell their private equity portfolio... There is no smart money on the street that's going to look at any private equity portfolio from Harvard without asking for a 20, 25, 30, 35, 40% discount, because your back will be totally against the wall.View on YouTube
Explanation
As of November 30, 2025, only about 5 months have passed since the July 4, 2025 episode, while the prediction’s horizon is ~18 months (into early 2027), so the full time window has not elapsed.
What we do know so far:
- Harvard is under material financial pressure. Federal funding freezes and cuts totaling roughly $2.6B have contributed to a $113M operating deficit in FY 2025, prompting borrowing, hiring freezes, and cost cuts, but not an existential inability to operate. (reuters.com)
- Harvard Management Company is planning/has agreed to sell about $1B of private equity fund stakes (roughly 5% of its PE portfolio) via a secondary sale advised by Jefferies, with Lexington Partners as buyer. The process began in 2024 and is described as part of broader liquidity management rather than a sudden, last‑ditch move driven solely by the 2025 funding crisis. (thecrimson.com)
- Reporting on the broader secondary market indicates that university PE stakes (including Harvard and Yale) are generally selling at moderate discounts, with typical LP secondary sales around an 11% discount to NAV and Yale’s large deal reportedly at a <10% discount—well below the 20–40% haircut specified in the prediction. Harvard-specific pricing has not been publicly disclosed. (fortune.com)
Key parts of Friedberg’s forecast therefore cannot yet be confirmed or falsified:
- It is too early to say whether by early 2027 Harvard will face a severe budget shortfall so acute that it “will not have the budget to sustain themselves.”
- While Harvard is indeed selling private equity stakes, current reporting frames this as a strategic liquidity move rather than a forced, fire‑sale situation with the university’s “back totally against the wall.” (thecrimson.com)
- There is no public evidence so far that Harvard’s PE secondary sales have cleared at the 20–40% discounts to reported NAV that the prediction specified; available benchmarks suggest materially smaller discounts.
Because (1) the 18‑month window has not expired and (2) the critical discount and severity conditions of the prediction are not yet observable or disclosed, the correct classification at this time is **“inconclusive (too early)” rather than right or wrong.