There’s been a resounding silence from Palo Alto on this and all other questions regarding Stanford’s offer to sell a large number of its assets on the secondary market — pretty much the whole portfolio, according to one source.
News of the proposed sale followed a drop in Stanford’s endowment last month of 27%, possibly the university’s largest loss ever.
“Trying to put a portfolio that huge out to market is very unusual,” the source said. “Bulk portfolios are not selling, and most sellers try to do sales quietly, to a targeted group of buyers.”
Keeping a sale this large a secret, though, is impossible — too many people know about it and will talk — so maybe Stanford is trying to avoid the stigma that was attached to Harvard last year, when the university put $2 billion of its portfolio on the market and the reaction from prospective buyers was, “If Harvard is selling this, do I want to buy it?” In other words, what are these guys trying to unload on me?
By putting everything on the table, Stanford could disguise its intentions, the source said — then it could cherry-pick bids, which it appears to be doing, and sell whatever it wants.
One certain outcome of Stanford’s and other endowment’s and foundation’s shrinking portfolios is less money for venture capital. They’ve been among the biggest backers of VCs, who will now be forced to consider taking money from funds-of-funds or pension plans that they may have previously rejected.