🎓 Why Ivy League Endowments Are Flooding the Secondaries Market — But Cornell Isn’t
The private equity secondaries market is booming — and some of the most prominent sellers fueling this surge are elite Ivy League university endowments.
Yet one Ivy League outlier stands apart: Cornell University. While its peers are unloading stakes at discounts just to raise cash, Cornell's $10.7 billion endowment is avoiding the fire sale altogether.
🎓 Why Ivy League Endowments Are Flooding the Secondaries Market — But Cornell Isn’t
The private equity secondaries market is booming — and some of the most prominent sellers fueling this surge are elite Ivy League university endowments. Institutions like Yale and Harvard have turned to the secondaries market in recent quarters to offload billions of dollars' worth of illiquid private equity stakes, seeking liquidity in a high-rate environment that has disrupted the traditional capital recycling model.
Yet one Ivy League outlier stands apart: Cornell University. While its peers are unloading stakes at discounts just to raise cash, Cornell's $10.7 billion endowment is avoiding the fire sale altogether.
💰 The Secondaries Boom by the Numbers
Global private equity secondaries volume hit $112 billion in 2023, according to Jefferies — the second-highest year on record after 2021.
Endowment-related selling accounted for nearly 15–20% of LP-led secondary transaction volume in late 2023, up from just 5–7% pre-COVID.
Leading secondaries buyers (e.g., Ardian, Lexington Partners, and Coller Capital) report record deal flow, with LP portfolio sales dominated by older-vintage funds (2012–2017).
Many LP portfolios are trading at 8–15% discounts to NAV, per Evercore’s 2023 year-end report.
🧨 Why the Rush to Sell?
1. Liquidity Crunch from the "Denominator Effect"
When public equities fell sharply in 2022, private equity allocations ballooned as a percentage of total portfolios — not because PE grew, but because public assets shrank. This overweighting triggered rebalancing pressure at institutions that have strict asset allocation policies.
2. Slow Distributions
Private equity GPs have been slow to return capital, as IPO and M&A markets remained weak in 2022–2023. According to Hamilton Lane, distributions from PE funds dropped nearly 50% YoY in 2023, leaving LPs starved for cash.
3. High Interest Rates
Rising rates have increased cash drag and opportunity cost. Some endowments are shifting back toward liquid, income-generating assets and need to raise cash.
4. Tactical Rebalancing and Portfolio Cleanup
Institutions are taking advantage of the more mature secondaries market to clean out underperforming legacy funds, reduce manager count, or rebalance vintages — even if it means accepting NAV discounts.
🧠 Cornell’s Contrarian Position
In contrast to the liquidity squeeze affecting peers, Cornell’s CIO Ken Miranda recently told Institutional Investor:
“I don’t know what’s going on there. We’re not having that situation at all.”
Cornell’s $10.7 billion endowment has apparently:
Maintained better cash reserves,
Avoided aggressive overcommitment strategies (a common practice where LPs commit more capital than they have under the assumption that capital calls will be staggered), and
Built a more balanced, liquid portfolio that didn't suffer from the denominator effect or a steep drop in distributions.
Moreover, Cornell’s diversified asset mix — including real assets, hedge funds, and lower PE overweights — appears to have helped it weather the recent cycle better than peers.
🧪 Breakdown of Ivy League Endowments and Their Estimated PE Allocations
University Endowment Size (FY 2023) Estimated PE Allocation Notable Activity Harvard $50.7B ~33% Sold PE stakes in 2023 via Evercore Yale $40.7B ~39% Known for high PE allocation; actively selling Princeton $34.1B ~30% Has reportedly sold off older PE vintages Penn $21.0B ~25% Rumored seller Columbia $13.6B ~22% Participated in secondary sales in 2022 Cornell $10.7B ~18% Not selling; liquidity well-managed Dartmouth $8.1B ~20% No major secondary activity reported Brown $6.6B ~27% Has reportedly tested secondary market interest
Note: Allocations are estimates based on public disclosures and market research.
🏗️ A Shift in Endowment Strategy?
The endowment model pioneered by Yale’s David Swensen emphasized long-term, illiquid alternatives like private equity and venture capital. That model has delivered outsize returns, but it’s also illiquid by design.
The surge in secondaries activity may indicate that even these sophisticated institutions are re-evaluating their tolerance for illiquidity—especially in an era of higher interest rates and more attractive returns from liquid assets like Treasuries or money markets.
Cornell's resistance to selling suggests a more conservative liquidity stance, or simply better timing and risk management.
🔮 Final Thoughts: Can the Secondaries Market Handle the Volume?
Despite the flood of supply, secondaries dry powder reached $140 billion in 2023, per Campbell Lutyens. This suggests there's still appetite — but pricing discipline is increasing.
Buyers are choosy, often rejecting portfolios with venture capital, recent-vintage funds, or “zombie” GPs.
Expect continued LP-led volume, especially from institutions facing pressure to fund operations, capital calls, or rebalance portfolios — unless markets rebound quickly.
As for Cornell? By not joining the secondary sell-off, it might avoid crystallizing losses and protect long-term returns — and send a quiet signal to the market that liquidity can be managed with foresight, not just fire sales.