Private equity, the endowment's top-performing asset class in the decade through June 2008, gained 26 percent in the past fiscal year, falling short of targets. Over the decade ended June 2011, the endowment's best performing asset class was fixed income.
Harvard's investments gained 21 percent in the 12 months ended June 30, increasing for the second straight year. The university had been squeezed for cash following the Lehman Brothers Holdings Inc. bankruptcy in 2008, caused by losses on derivatives used to protect the school against rising interest rates. As investments tumbled a record 27 percent, Harvard sold $2.5 billion of bonds in December 2008, cut jobs and postponed building projects.