Published On: Sun, Jun 22nd, 2014

Yeshiva University Cites 6.3% 11 Year Gain to Counter Reports of $1 Billion in Total Losses

Financially troubled Yeshiva University tries to put a bright spin on its current predicament.

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In response to claims of  $1 billion dollars lost, Yeshiva University’s president Richard Joel published a letter on its website in which he claimed that the school’s investments have had a 6.3% median return since 2002, putting it on a par with similar funds of other universities.

But the New York Post said that its analyst found that these numbers simply do not mirror the actual situation. According to the Post “The values don’t reflect the ups and downs of total assets, net assets, the pooled asset fund or the investment numbers in the university’s 2011, 2012 or 2013 annual reports.”

The school is said to have $500 million in debt and to have lost another $500 million to risky investments. As a result, it has been selling off much of its Manhattan real estate since last year, such as one of its lecture halls at 237 East 34th Street and ten residential buildings in Manhattan’s Washington heights neighborhood.

The Jewish Channel’s Steven I. Weiss, a YU graduate himself, recently wrote an investigative report published in TakePart in which he refuted claims that the University’s financial woes resulted from having been swindled by Bernie Madoff. Instead, according to Weiss, Yeshiva University lost the bulk of its endowment to risky hedge fund investments. The losses suffered there were ten times greater than those attributed to Madoff’s Ponzi scheme.

Weiss said that it was rare for a university’s bonds to be rated as junk and that YU was in danger of becoming insolvent by next year. He also pointed out that the university had more than three times the average investment in hedge funds for a billion dollar university endowment which usually runs at 21.5% saying, “It’s hard to say exactly what would have happened if they had just maintained the investments that they had in 2002. But It certainly seems like they wouldn’t have lost as much money and they wouldn’t have spent as much on the assumption that these investment gains would be there.”

In response, YU released the following statement: “It’s unfortunate that Yeshiva University wasn’t given sufficient opportunity to react to the TakePart article, which is full of half-truths and inaccuracies from as far back as a decade ago. The writer, who admits that he has an axe to grind with YU, claims to have worked on the article for two years, but contacted YU less than two days before publication, presented limited information that he planned to report and ignored most of what he was provided. Given the poor quality of this article apparently written for no purpose other than to damage YU, we will remain focused on the future and have no further comment on this matter, other than to share that YU has invested in its core, our students and faculty, with great results, and will continue to do so. Today, YU’s investment portfolio is strong and professionally managed by our investment office with careful board oversight and best-in-class conflict of interest policies in place.”

Founded in 1886, New York’s Yeshiva University has separate undergraduate colleges, for men and women, graduate programs, as well as a law school and a medical school. Originally located in the Lower East Side, the university combines Orthodox Jewish education with studies in modern sciences and liberal arts. The fully accredited institution also has a rabbinical school for the training of Orthodox Rabbis.

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