It's the cover story, Missing Billion, by Lisa Provence in this week's Hook.
Provence very carefully explains the history of the endowment's investing, defines hedge funds and private equity, and explains how UVa lost $1B.
No Wahoos are talking except in official printed statements, but others are. Blogger Henry Blodget at Clusterstock.com explains the potential ramifications:
"JP Morgan wealth-management strategist Michael Cembalest summarizes the situation:
The endowment's value as of October 2008 is $4 billion, and they have $1.6 billion in uncalled private equity, real estate and natural resource commitments on top of $1.4 billion already invested. [That's 75% of the endowment pledged to highly illiquid investments].
The endowment has now announced plans to sell not only public equity, but also several hundred million from hedge funds at a time of illiquid markets, and to explore selling their private equity in the secondary market (a "market" which only exists in the narrowest sense of the word; there's around $15 billion in buy side funds looking for very steep discounts).
Endowments like UVA's make annual contributions to a university's operating budget, so a portfolio with a 75% allocation to private funds (holdings plus future commitments) is a very aggressive one.
Sorry, UVA alumni. You're going to have to make those gifts all over again."President John Casteen recently addressed the issue, sort of, in this statement to the community. Exec VP and COO Leonard Sandridge attempted to allay concerns in this press release.
Read UVIMCO's disastrous Third Quarter Report here.
See the Clusterstock.com post UVA: Sorry, Alumni, We Gambled Our Endowment and Lost.