April 24 (Reuters) - Harvard University's endowment is in advanced talks to sell private equity fund interests totaling about $1 billion amid financial uncertainty and President Donald Trump's threats to cut federal funding, according to Bloomberg News on Thursday.

Trump has threatened to withhold federal funding from colleges and universities over pro-Palestinian campus protests against U.S. ally Israel's military assault on Gaza, as well as a range of other issues, such as climate initiatives, transgender policies and diversity, equity and inclusion programs.

Harvard Management Company, which oversees the largest endowment in U.S. higher education, is being advised by Jefferies Financial Group to sell the portfolio to private equity firm Lexington Partners, the report added, citing sources familiar with the matter.

The terms of the deal, which might be in a secondaries transaction, are not final and are subject to change, according to the report.

Harvard Management, Jefferies and Lexington Partners did not immediately respond to a Reuters request for comment.

Thursday's report comes after Harvard University said earlier in the month that it plans to borrow $750 million from Wall Street as part of contingency measures.

The Trump administration has set conditions for Harvard to receive federal funds, including a ban on protesters wearing masks and other restrictions.

Harvard has a $53 billion endowment, the largest of any U.S. university. Advocates, students and several faculty members had called on university leadership to resist the administration's demands.

Yale University said on Tuesday that it was exploring a sale of private equity fund interests as well, and is being advised by investment banking firm Evercore.

Princeton University had also said earlier in the month that it was also considering selling about $320 million in taxable bonds after the U.S. government froze several dozen research grants to the school.

(Reporting by Pritam Biswas in Bengaluru; Editing by Tasim Zahid)

((Pritam.Biswas@thomsonreuters.com;))