The University of California's Investments Committee convened on May 11, 2025, to discuss significant trends in the secondary market for private equity and the implications for university endowments. The meeting highlighted the increasing activity in the secondary market, where both general partners (GPs) and limited partners (LPs) are seeking liquidity by selling stakes in private equity funds. Notably, Yale University is attempting to sell a $6 billion portfolio, while Harvard is also in the market with a $1 billion offering. The prices for these transactions have fluctuated, with recent sales averaging around 80 to 90 cents on the dollar.

Committee members expressed concern over the high levels of illiquid assets held by many endowments, which could pose challenges in meeting financial obligations. The discussion drew parallels to the financial crisis of 2008, suggesting that many institutions may be facing systemic issues due to overexposure to private equity. The committee emphasized the importance of liquidity management, noting that the University of California has maintained a strong liquidity position, largely due to its strategic decisions made in response to previous financial crises.

The committee also addressed the potential impacts of federal budget changes on investment strategies, particularly concerning retirement savings assets. Members stressed the need for ongoing communication between the Investments Committee and the finance committee to navigate potential budget cuts and ensure adequate liquidity for operational needs.

In a proactive move, the committee invited smaller endowments facing liquidity challenges to reach out for potential collaboration, highlighting the University of California's willingness to assist in navigating the current market landscape. The meeting concluded with a focus on maintaining a cautious yet strategic approach to investments, prioritizing liquidity and financial stability in uncertain economic conditions.