Yale University is offloading a massive private equity portfolio amid mounting pressure from federal funding cuts enacted by President Donald Trump's administration.

The university is selling a multibillion-dollar portfolio in the secondaries market, four sources told Secondaries Investor. The transaction could go up to $6 billion in size, according to three of the sources.

Yale University pioneered the “endowment model”, which emphasises diversified investments with a significant allocation to alternative assets -particularly private equity - as a key driver of returns. The university is the 27th largest PE investor in the world with over $2o billion invested in the asset class, according to affiliate title Private Equity Internationals Global Investor 150 2024 ranking.

This is Yale's first known sale in the secondaries market, two sources told Secondaries Investor.

The move comes as Yale and other Ivy League schools face growing pressure from the Trump administration's threat to limit federal funding and revoke the tax-exempt status of top US universities. Earlier this week, the administration froze $2.2 billion in grants to Harvard and signalled plans to challenge its tax-exempt status, which allows institutions to avoid paying federal income taxes on their endowments.

Despite the funding and tax challenges, Yale has attributed the sale to its portfolio management needs, according to a source. The quality of assets involved in the transaction is mixed, the source added.

Evercore is advising Yale's secondaries sale, Secondaries Investor understands.

Yale is entering the secondaries market at a turbulent time. The bid-ask spread is expected to widen as investors factor in valuation uncertainty driven by the tariffs, multiple market participants told Secondaries Investor in the week following Trump's Liberation Day announcement. Some are even“closely monitoring conditions for repricing opportunities”, according to Campbell Lutyens' latest Market Pulse report.

Assets are priced at Q4 2024 marks, which are now overvalued compared with the expected Q1 2025 marks, Partners Group head of infrastructure partnership investments Dmitriy Antropov told Secondaries Investor on 9 April before Trump announced the 90-day pause on tariffs with exception of China.

Most LPs are not rushing to liquidate their private market investments as the impact of tariffs continues to play out. Australian superannuation fund Aware Super, for example, is having difficulty gauging if the bid-ask spread will get too high for a sale process it plans to launch later this year. Its head of private equity Jenny Newmarch told Secondaries Investor on 11 April that the “window might have closed” on selling.

The Yale deal is among the largest LP-led transactions in recent years. Last summer, the California Public Employees' Retirement System launched a secondaries sale, which reached $3 billion-$4 billion in size. Ardian, AlpInvest Partners and Partners Group were anchor investors in the transaction, Secondaries Investorreported in January. New York City's pension system also sold a $5.5 billion portfolio to Blackstone Strategic Partners earlier this year, affiliate title Buyouts reported last month.

LP-led deals reached $89 billion in volume in 2024, up 41 percent year-on-year, according to Evercore's FY 2024 Secondary Market Review. Total secondaries transaction volume hit a record high of $160 billion in 2024.

Yale and Evercore did not respond to requests for comments.