Hedge fund billionaire Bill Ackman has been vocal in his criticisms of what is happening at his alma mater, Harvard University.
After 31 Harvard student groups signed a letter blaming Israel as “entirely responsible” for Hamas’ barbaric slaughter of innocent Israelis,Ackman called on Harvard to release all of the names of the students to make sure the young Hamas supporters are never hired by a Wall Street firm.
Last week, President Trump announced he will be taking away the far-left University’s tax-exempt status after the school refused to comply with five key demands from his administration. Harvard instead filed a lawsuit.
“We are going to be taking away Harvard’s Tax Exempt Status,” Trump wrote on Truth Social. “It’s what they deserve!”
Harvard’s tax-exempt status has played a key role in amassing the nation’s largest university endowment standing at roughly $53 billion, with $2.4 billion ‘earned’ in the 2024 fiscal year, although Ackman’s assessment of the actual valuation does not paint a positive picture of the University’s financial state.
Ackman joined CBNC to discuss the latest move by the University to sue the Trump administration.
SquakBox’s Joe Kernen asked, “Bill, you’re an alumnus. What should Harvard do where you’d say, Okay, to get back in your good graces, what does the university need to do at this point?”
“Sure. The right thing to do, or I should say, the wrong thing to do is receive a letter from the administration and write back saying, ‘We’re doing nothing. In fact, we’re going to sue you.’ Okay, that’s what Harvard did,” Ackman stated.”What Harvard should have done, it should have said, ‘President Trump, you make some good points.’”
“‘Taxpayer money coming to Harvard, that’s a privilege. It’s not a right. Taxpayer money going to an institution, the institution cannot have massive amounts of administrative blow, waste, bureaucracy. We’re going to eliminate it. We’re going to hire Alex Partners, a restructuring firm. We’re going to take a 3G, zero-based budgeting approach to the way we run our administration, things that are not… If inefficiency is causing harm, and we’re wasting taxpayer money. Mr. President, you’re right. Harvard has become…there is not viewpoint diversity at Harvard. Students are self-censoring their remarks in classrooms. Faculty are doing the same because people are afraid to have real conversations.’”
“You can’t learn. You go to college to be exposed to a broad array of ideas. I guess maybe I’m supposed to be looking at Joe…a broad array of ideas. That’s not happening at Harvard. Free speech is not happening at Harvard.”
“You acknowledge the areas where the President is absolutely correct, and you say, ‘Look, we’re going to fix those areas. We want to make a deal, Mr. President.’”
“What have we seen from Trump? He asked for the moon, shock and awe. Same thing true for Harvard, that most recent letter. You could argue it’s certainly overreaching in some of the elements, but he wants to make a deal. Make a deal with the President.”
“Commit to fix these things, which, by the way, your alumni want you to fix. It’s in the best interests of Harvard. And treat Each shareholder on the taxpayer money as a fiduciary, and they’re not doing that. Harvard is not in a good financial position. This is something I think is not well appreciated. They nominally have a 53 billion dollar endowment. I don’t believe the carrying values of their endowment. Eighty percent of the assets are invested in real estate, private equity, and venture capital. It’s not liquid. They’re apparently selling a billion dollar slice of their private equity. Watch where that gets priced relative to the carrying value of the portfolio. My guess is it could be 30, 40% below the current carrying value to get a bid.”
“In my business, if I owned a slice of something, I sold a piece of it at a 30, 40% discount, I’d have to remark my entire portfolio. So one, The endowment, in my view, is massively overstated in terms of what it’s really worth.”
“The second thing is no one talks about the fact that Harvard now has $8 billion of debt. I read the perspectives for the recent bond issue. You have 53 billion of overstated assets that are illiquid. You have $7. 9 billion of debt, which you owe. As a donor, do you want to give money to a nonprofit institution, which is going to go into the institution, going to go out the door to pay interest to bondholders?”
“My experience is nonprofits that borrow money, it doesn’t end well. Then you have, what do they rely on for current funding? Money every year from the US government, money every year from donations. Donations, I have to believe they’re down meaningfully, and tax-exempt status. Another reason that induces people to give money to their university is to get a tax deduction.”
“Fair or unfair to try to take the tax-exempt status away?” Kernan asked.
“I think it’s fair,” Ackman replied.
“Again, Harvard became, over time, a political advocacy organization for one party. When a university goes from being a university to becoming a political advocacy organization, it doesn’t deserve nonprofit status.”
“Harvard should It shouldn’t be a place where students go to learn and the best research gets done. It shouldn’t be a place that is allowing pro-terrorist organizations on campus and that only allows certain kinds of thinking and speech on campus. That’s a political advocacy organization. It’s not a university.”
“I don’t think we’re going to end up there where Harvard loses its tax-exempt status. I want Harvard to succeed. It’s been very important to me over time. But really, it got itself to a very bad place. And Alan Garber is a good president, but he’s not managing… ”
“The mismanagement here is… Penny Pritzker, if this were any other corporation, the notion that she’s still chairman of Harvard leading the charge here in terms of how Harvard managed everything from COVID, and I know we have to go, but it’s an important topic, to endowment management, to waste, to free speech, to who they hired as president of the university. It’s time for a change in leadership in the board at Harvard.”
Watch:
In 2024, Ackman called for Democrat mega-donor Penny Pritzker to step down as the Board Chair for Harvard.
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