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Laxman Pai, Opalesque Asia:

New policies proposed by the US administration and regulatory changes are set to have a devasting impact on endowment funds. New analysis and scenario mapping carried out by Ortec Finance reveals that the size of Harvard University's endowment fund - currently the largest endowment in the United States - could plummet as much as 40% by 2040, from a projected $72 billion to $43 billion given the policy changes. Furthermore, the analysis by Ortec Finance, a leading global provider of risk and return management solutions for insurers, pensions funds and asset management companies, reveals that this could decrease to just $29 billion when inflation is also taken into account.

This fall in assets under management coupled with its financial commitments will create huge liquidity pressures on Harvard's endowment fund as Ortec Finance's analysis reveals the top 10 US endowments hold 72% of their investments in illiquid assets, with roughly 36% of total investments sitting in private equity. Comparatively, only 20% of their total investments sit in public equity.

With the announcement of Trump's 'one big beautiful bill act' the longstanding model of US endowments, which have been a staple of the investment landscape for decades, is facing unprecedented challenges. Ortec Finance has carried out in-depth financial modeling creating both a 'full policy scenario' (a worst-case scenario) and 'limited policy scenario' to reveal the long-term impact ove......................

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