Elite U.S. Endowments: Government Funding and Liquidity Pressure

Related research: A Private Equity Liquidity Squeeze By Any Other Name • The Great Private Equity Squeeze of 2023 • FY2023 Ivy Report Card: Volatility Laundering and the Hangover from Private Markets Investing

4/23/2025 Update: All statistics in this research, including unfunded private equity (PE) liabilities, have been updated with fiscal year 2024 (FY24) data.
5/6/2025 Update: Final FY24 data update to conform with MPI Transparency Lab. Most importantly Brown’s endowment unfunded PE $1.65B changed to MPI-estimated $1.2B (reported $1.65B represents all private unfunded commitments).  Some numbers and conclusions have changed – please take a note.

Key takeaways include:

• Yale and Harvard hold the highest unfunded PE commitments, at $8.1 billion and $8.2 billion respectively. Notably, any shortfall from annual government funding represents a small fraction of these obligations.
• Liquidity risk rankings show Yale moving into the #2 position (62.1%) behind Brown (63.8%), followed by Harvard (53.2%) and Princeton (51.2%).
• According to our analysis of FY24 financial statements, Harvard has the largest absolute allocation to PE—$24 billion, representing 39% of its total investment portfolio (including the endowment). Yale leads in relative terms, with 47% of its investments ($21 billion) allocated to PE.
• With FY24 average PE distributions at the lowest level in over a decade it is not clear how these massive endowments are able to fund capital calls, not to mention any potential gaps in funding.
• Cornell and Columbia demonstrate comparatively low liquidity risk among elite institutions, at 20% and 28% respectively. However, a federal funding freeze could exacerbate their financial strain—though not to the same extent as Brown, Yale, Harvard, or Princeton.
• Dartmouth possesses the most resilient endowment portfolio against potential pressures, with MIT following closely behind.

Princeton University recently became the latest elite institution to face financial pressure as the Trump administration intensified efforts to enforce policies on antisemitism. As part of this effort, the U.S. government froze several dozen of research grants to Princeton, following similar actions against Columbia and Harvard Universities. Additionally, it suspended $175 million in funding to University of Pennsylvania due to UPenn’s refusal to comply with the administration’s ban on men participating in women’s sports.

Federal funding cuts could impose significant financial strain on universities, though some institutions rely more heavily on government support than others. One key factor in determining a university’s resilience to such funding disruptions is the liquidity of its endowment. Over the years, Ivy League endowments have increasingly allocated their assets to illiquid private equity investments. According to MPI Transparency Lab, private equity holdings now represent approximately 37% of assets under management (AUM) and an even higher percentage of overall exposure to the asset class when measured quantitatively.

Compounding this issue, elite institutions are already experiencing substantial liquidity pressures as they scramble to raise cash for private equity capital calls. A year ago, Princeton’s PINCO CIO Andrew Golden told Financial Times this has been the “‘worst ever environment for liquidity” in private equity. The introduction of government funding cuts or freezes only exacerbates this situation because 60-70% of the government grants are typically used to cover overhead on-campus costs.

To better understand which endowments are most sensitive to federal funding disruptions, we expanded our 2023 fiscal year liquidity research. The relationship between funding vulnerability and endowment size is not straightforward—many factors play a role beyond just the overall size of an institution’s endowment.

Liquidity Risk vs. Government Funding Dependence

For our analysis, we extracted U.S. federal grant numbers from endowment FY24 annual reports and USA Spending website (for Dartmouth and UPenn). We have not included federal grants related to SLAC for Stanford and Lincoln Lab for MIT, as both labs are government-owned.