More probing of university endowments

A financial manager reads the fine print of Princeton's financial statements, and doesn't like what he sees. The "most bizarre" part of trying to make sense of the university's complex investments, which relied heavily on hedge funds and private equity, he writes,

is trying to appropriately weight the significance of Deloitte & Touche's observation in the auditor's report that "the financial statements include investments valued at $6.497 billion (38 percent of net assets) … as of June 30, 2007 … whose fair values have been estimated by management in the absence of readily determinable fair values. Management's estimates are based on information provided by the general partners or a valuation committee." [my emphasis]

"One wishes," writes the author, a former director of research for a Wall Street firm, "that the same sort of valuation technique could have been included on grades sent home during undergraduate days."