Harvard has received a $400 million endowment, the largest in the history of Harvard University, to support the School of Engineering and Applied Sciences from billionaire hedge fund manager John A. Paulson. The president of Harvard, Drew Gilpin Faust, said Paulson's understanding of the importance of the engineering school will "change Harvard and enhance our impact on the world beyond."
Tamar Lewin, reporting for The New York Times, writes that Paulson is 59, graduated from Harvard Business School in 1980, and manages a hedge fund of $19.5 billion for wealthy clients. He also oversees pension funds such as the New York State Common Retirement Fund.
In 2013, Paulson earned $2.3 billion, according to Institutional Investor's Alpha magazine, by taking 1 to 2% of assets via management fees and a performance fee of 20% of annual gains, which is standard in the hedge fund industry. The walls of his office in Rockefeller Center in Manhattan are covered with watercolors by Alexander Calder.
Paulson's gift was added to the university's $6.5 billion fund-raising campaign, which started its public presence in September 2013. Mr. Paulson was not without his critics, who questioned his choice to add to Harvard's expansive coffers rather than choosing to donate such a large gift to those in greater need.
The engineering school, which will be renamed the Harvard John A. Paulson School of Engineering and Applied Sciences, will be moved across the river to Allston, the site of a new science campus next to Harvard Business School and the Harvard Innovation Lab.
"For 379 years, Harvard has had a profound global impact across a multitude of disciplines that benefits all of humanity," Mr. Paulson said in a statement. "SEAS is the next frontier for Harvard, and its expanding campus in Allston promises to become the next major center of innovation."
This endowment could give Harvard a boost in the ongoing competition to enroll top students, particularly in the areas of computer science and engineering. Currently, Stanford University is making important strides in its wealth and standing, in part because of sharing the same locale as Silicon Valley, report Douglas Belkin and Rob Copeland of The Wall Street Journal.
This "extraordinary gift will enable the growth and ensure the strength of engineering and applied sciences at Harvard for the benefit of generations to come," Faust said in a statement.
Paulson's generous gift follows two other very large donations. One came from hedge fund manager Kenneth Griffin, who gave $150 million to the university to be used for financial aid. The other was from the family of Gerald Chan, a Harvard-educated investor, who gave $350 million to the school of public health.
Paulson's donation is not for buildings on the new extended campus, but instead will be used for programs and personnel at the school of engineering. Officials at Harvard say that Paulson's gift will be the start of a new era at the school – the collaboration of the business and engineering schools.
Harvard's engineering department grew into a school in 2007. Now the student enrollment has more than doubled, along with a 30% growth in faculty. Last year, Steven Ballmer, a Harvard graduate, gave approximately $60 million in order to hire 12 faculty members to the engineering school's existing team of 24, writes John Lauerman of Bloomberg.
Paulson's gift may be proof that the wealthiest US institutions of higher education are on the receiving end of more than their share of philanthropy. Last year, Harvard received $1.16 billion, and Faust is on his way to raising $6.5 billion by 2018.