Earlier this month, Bill Ackman made it clear that he is on Trump's side in his ongoing battle with Harvard. He correctly suggested that Harvard has become "a political advocacy organization for one party."

One of the reasons why Harvard is in a panic over this fight is because their famously huge endowment is not nearly the financial powerhouse people think it is. It may be large, but it's not liquid.

Ackman recently broke it down in a lengthy post on Twitter/X:

I believe it is likely @Harvard's that financial position is overstated by the media and the general public. I believe this is principally for two reasons.

One, people ignore Harvard's $7.9 billion of debt outstanding, which is likely to increase in order for Harvard to meet its cash needs due to the loss of government funding and reduced alumni gifts.

Second, Harvard's endowment is principally invested in illiquid private assets including real estate, private equity, and venture capital funds.

Real estate and private equity funds are highly levered so relatively small changes in asset values can have a large impact on equity values. For example, if a real estate fund's asset values decline by 15% and the assets are levered 60%, the fund's equity value will decline by 37.5%…

In my interview with @nfergus below, I said the realizable values of Harvard's private assets could be as low 40% of current carrying values if Harvard needs to liquidate substantial portions of its assets to meet its obligations.

I am told by an expert I highly respect in this space that my 40% discount is much too high and a 7% – 15% discount is a better estimate.

Watch as Ackman analyzes the real value of Harvard's endowment below: