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Yale Beats Harvard Again

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Yale’s massive endowment beat Harvard again. The endowment returned 12.3% (net of all fees) for the year ended June 30, 2018. The endowment assets surged to US$ 29.4 billion as of June 30, 2018. The Harvard Management Company, which oversees the endowment, generated a 10% for the same period compared to Yale. Harvard’s endowment is bigger at US$ 39.2 billion. Yale avoided an overhaul of its endowment like Harvard. Harvard endowment’s CEO N. P. Narvekar is still realigning the portfolio, selling off assets and reducing staff closer to 100 people.

For Yale, U.S. stocks generated a 12.4% return versus foreign equities at 14%. Yale’s absolute return portfolio generated a return of 4.8%, while venture capital posted a return of 16%. Surprisingly, Yale struggled with real estate at 2.7% and natural resources at 1.7%.

Out of all the Ivy League schools, Princeton leads the pack with 14.2% return for fiscal year 2018, with Brown University coming in at second place with a 2018 FY return of 13.2%.

Big Bet on VC, Lowering U.S. Stocks

Yale has a 26% asset allocation target to absolute return for fiscal year 2019 and a 18% target for venture capital, while targeting 3% for U.S. stocks.

BlackRock Experiences Outflows Among Institutional Investors

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Is BlackRock at peak earnings? BlackRock disclosed its third quarter 2018 results showing a growth of assets under management at US$ 6.4441 trillion at the end of September 2018 versus US$ 5.976892 trillion at September 2017. However, a large portion of the AUM growth has been in the ETF business, iShares, which tends to be very low in fees. The iShares business saw an inflow of US$ 33.7 billion for the quarter.

For the third quarter, BlackRock experienced US$ 24.8 billion in institutional investor outflows, with US$ 23.6 billion being on the index side, while US$ 1.2 billion being on the active side. Institutional investors such as pensions, insurers, and hedge funds withdrew from passive equity strategies. BlackRock saw US$ 4.745 billion in outflows in active equity on the institutional side, but seeing inflows of US$ 2.471 billion in multi-asset institutional and inflows of US$ 1.468 billion in alternatives institutional.

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GIC Buys Large Stake in Nordic Aviation Capital

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Singapore’s GIC Private Limited, a yield-hungry sovereign investor, invested in Denmark-based Nordic Aviation Capital A/S, becoming a significant minority shareholder. Other shareholders in Nordic Aviation Capital include EQT VI Limited fund, KIRKBI Invest (wealth origins tied to Legos), and Martin Møller, the founder of Nordic Aviation Capital. EQT VI will remain the largest shareholder of Nordic Aviation Capital. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

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Trump Wants Pharma Companies to Disclose Drug Prices in Advertisements

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U.S. President Trump is progressing on plans to mandate pharmaceutical companies to reveal their prices in drug advertisements. “The drug industry remains resistant to providing real transparency around their prices, including the sky-high list prices that many patients pay,” Health and Human Services Secretary Alex Azar said in a statement. “So while the pharmaceutical industry’s action today is a small step in the right direction, we will go further.”

The U.S. Health and Human Services Department would require pharmaceutical companies to include drugs’ sticker prices in their video advertisements. This would be similar to how drug companies disclose the laundry list of side effects.

Increasingly, sovereign funds like Temasek Holdings have backed mid-stage pharmaceutical companies and other therapies, while market investors like Norway’s GPFG have large holdings in listed pharmaceutical companies.

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