Harvard University's global endowment fund distributed funds of $US1.7 billion ($NZ2.3 billion) during the 2009 financial year, contributing more than one-third of the university's operating budget.
Harvard Management Company chief executive Jane Mendillo said there was "extreme volatility and financial dysfunction impacting markets around the world, as well as the Harvard portfolio" .
This led to a $US11 billion, or more than 27% decline in the endowment fund value, which fell to $US26 billion.
"The management company actively managed the endowment through truly unprecedented conditions over the past year while maintaining the long-term focus on investment opportunities that has served Harvard so well historically," she said in the online Harvard Gazette.
During the past 10 years, the Boston-based 36-year-old Harvard Management Company's active management added about $US18 billion of value over what the university would have earned by using a "simple 60/40" stock and bond portfolio.
Since 2001, scholarships and awards to students had more than doubled from $US156 million to $US388 million in 2009.
The management company invests globally for long-term returns, in natural resources and agriculture, with commodities its largest portfolio contributor at 14%, private equity companies 13%, real estate 9%, US and foreign stocks 11% each plus a variety of bonds and cash.
Endowment funding for Harvard goes towards fiscal aid, faculty salaries, facilities maintenance and endowment income for student fiscal aid programmes, and has replaced loans with grants, with estimates Harvard will spend $US145 million on undergraduate financial aid this year.
