Someone is staring at an increasingly difficult-to-explain number somewhere in Cambridge, inside the modest offices of Harvard Management Company. As of 2025, Harvard’s unfunded commitments to private equity funds totaled $7.9 billion. The same amount was $4.6 billion eight years ago. The difference between those two figures reveals information about timing, ambition, and what happens when the deal-making industry slows down more quickly than anyone anticipated.
On the surface, Harvard Management Company’s entry into private markets wasn’t careless. The endowment was perceived as underperforming in comparison to peers like Yale and MIT when NP “Narv” Narvekar took over as CEO in 2016, in part due to its relatively small private equity exposure. The “allocation to buyouts, growth, and venture capital continues to be low relative to what likely makes sense for Harvard,” he stated bluntly in a 2019 letter.” The next change came quickly. By 2025, private equity accounted for 41% of the portfolio, up from 16% in 2017. In 2021, when almost everything in private markets appeared certain, the strategy recorded a record 33.6 percent return.
The hangover followed. The IPO market was cooled by higher interest rates. Purchases slowed. There were fewer clean exits available to portfolio companies that private equity funds had purchased at high valuations during the pandemic-era boom. In comparison to the commitments that are still unfunded on the books, distributions back to limited partners—the cash flows that organizations like Harvard rely on to fulfill their own obligations—dried up. “It’s really this vicious circle,” Institutional LPs CEO Philip Casey told the Financial Times. “The question is: have they been writing cheques that they can’t cash?” Harvard declined to comment, which is noteworthy in and of itself.
It seems that the timing, rather than the exposure itself, is what sets Harvard apart from other major endowments. The funds with the highest level of concern are those from the Covid era, specifically the vintage years 2020 and 2021. Many of those vehicles made investments in businesses that are currently waiting longer than anticipated for profitable exits at their peak valuations. For Harvard, those funds stand for both the possibility of future profits and the danger of ongoing, sluggish distributions at the wrong time. The university must contend with ongoing pressure from Washington regarding research funding cuts as well as a federal excise tax increase on endowment income that will take effect in July. Over one-third of Harvard’s operating income comes from endowment distributions. When liquidity is the main concern, that is an uncomfortable position.
As of the 2025 annual report, HMC’s cash on hand was about $1.7 billion, or 3% of the endowment. The $7.9 billion in unfunded commitments are not all due at once; instead, capital calls are drawn down gradually as fund managers allocate capital. However, observers are keeping a close eye on the mismatch between long-dated private assets and growing short-term cash needs. In April 2025, Harvard was in advanced negotiations with Lexington Partners to sell approximately $1 billion worth of private equity fund interests on the secondary market, as advised by Jefferies. According to the university, political pressure had no bearing on the sale. Notably, it was also Harvard’s second time doing something similar; in 2021, it sold assets worth nearly $1 billion.
According to reports, Narvekar intends to retire as early as 2027. At a university that is becoming less and less able to wait, the person who takes his place will inherit a portfolio that is heavily invested in assets that reward patience. A critical evaluation was provided by Boston University lecturer Mark Williams, who has researched HMC: “HMC under Narvekar took higher risk and got lower return.” Since private equity returns are measured over decades rather than quarters, it is genuinely unclear whether that conclusion holds true over the entire investment cycle. However, Hunter Lewis, who counseled Harvard when HMC was first established in the 1970s, stated the immediate problem more succinctly: “You need liquidity to deal with whatever happens.” That’s precisely what Harvard is looking for right now.
