Bryan Hogan

The @nytimes published a story today with the headline: "Bill Ackman's Campaign Against Harvard Followed Years of Resentment." The premise of the story is false. I have held no resentment toward Harvard ever. And I have none now. The story gives the impression that my motivation for raising issues about antisemitism at Harvard and President Gay were due to prior grievances. This is entirely false and misleading. It is true, however, that I continue to have a serious issue with Harvard in connection with a donation of stock in a private company that I made in late 2017. The short version of the story is as follows: In 2017, I was in the middle of a divorce, Pershing Square had gone through a large drawdown, investors were redeeming, and it was a very challenging period of time in my life. In the midst of my personal and business challenges, I got a call from Harvard with good news. Harvard had been able to recruit Raj Chetty from Stanford and it needed money to fund his chair. I had previously funded a $25 million initiative to recruit the best behavioral economists in the world to Harvard. Raj is considered one of the best economists of his generation and a likely candidate for the Nobel Prize. He was a key recruit to the initiative we had launched, the so-called Foundations of Human Behavior. It was important to me that I could fulfill our long-term plan to recruit him despite my difficult personal circumstances at the time. The problem was that I had no liquidity as my divorce consumed more than all of it (I had to borrow a lot of money) and my business was in a bad place. But it was very important to me to recruit Raj. I knew Harvard could find the money from someone else, but I wanted to fulfill my original plans for the Foundation of Human Behavior initiative. It was important enough to me that I agreed to give Harvard stock in a private venture-backed company that I expected would be worth many multiples of that value in only a few years. I had previously given five or six chairs to Harvard, but this is the only one that carries my name, such was its importance to me at the time. I entered into an unusual development agreement with Harvard to address my concern about giving away private stock that was likely going to be worth much more in the future. I gave Harvard $10m of stock in the company valued at the most recent round's valuation. My agreement with Harvard provided that if and when the company went public in a few years, if the stock was worth more than $15m, I would have the right to allocate the excess realized value above $15m to the Harvard-related initiative of my choosing. In the event the stock was worth less than $10m, I committed to make up the difference with an additional donation to the University. In Wall Street speak, Harvard had a put to me at $10m, and I retained a call at $15m, with the right to allocate the excess value to the Harvard initiative of my choice. At the same time as the Harvard gift, I donated the rest of the stock I owned to the @PershingSqFdn and a donor-advised fund (DAF). I used the benefit of that donation and the gift to Harvard to offset other taxable income I had that year, which gave me additional cash which I used to resolve my divorce. Three years later, in January 2021, I learned from a banker that the private company, Coupang, was going public at a $50 billion valuation, valuing the stock I had given to Harvard at $85m, and the stock I had given the Foundation and the DAF at more than $900m. After I hung up with the banker, I immediately called my contact at Harvard, David Laibson, a friend and former classmate at the College, who was then Chairman of the Economics Department, to give him the good news. David was elated as I intended to use the funds to build a new home for Raj Chetty in his team on the Harvard Campus in a new building designed by Norman Foster for the Economics department. I had previously arranged for Norman Foster to tour the campus and to conceptualize designs for the building. The building was to be created by combining Littauer with a building constructed on the vacant lot behind it. I had told Harvard that I was prepared to give additional funds if necessary to make this happen. The next day I heard back from David. He was distraught. He told me that when he checked with Harvard Management Company (HMC, the entity at Harvard responsible for managing the endowment), he learned that HMC had sold the stock in March 2020. I was of course shocked, and I asked him why HMC had done so. He told me that HMC had told him that it needed to sell for liquidity reasons. I then asked David what price HMC sold it for. He said $10m, in a private transaction back to Coupang. I was not happy as you might expect. Harvard had sold stock which it could have put to me for $10m at a massive discount to its value at that time. Coupang had made massive progress since my gift in December 2017 and the stock's value had increased enormously. And Harvard had never told me that they had sold the shares. I was never offered the opportunity to buy the shares back for $10m or a higher price, which I would happily have done, had I known the University needed liquidity. And the notion that Harvard needed $10m of liquidity in the context of a $50 billion endowment is on its face absurd. Any sophisticated investor should also understand that when a private venture-backed company is buying back stock, it is a bad idea to sell. Harvard sold the stock despite the fact that we had a contract which provided the University with downside protection at $10m while allowing it to retain 100% of the upside. It made no economic sense whatsoever for Harvard to have sold. To make matters worse, none of HMC, the administration, or even my development officer had the courtesy to apologize. I heard from no one by email, phone or otherwise. I then waited six months after the IPO until the IPO restrictions on the stock were lifted and I sold all of the stock retained by the Foundation and the DAF in a block trade at a slight premium to the IPO price. The good news is that the Pershing Square Foundation and the related DAF received nearly $1 billion from the stock sales, which we have been allocating to good causes ever since. But the bad news is that Harvard missed out on $75m of potential gains, and I lost the opportunity to allocate $70m of those gains to the Harvard-related initiative of my choice. I was of course upset. After I sold the shares, I wrote a strong letter to the Harvard Corporation and Management Boards to which I did not receive a response. Sound familiar? I later sent an email to Larry Bacow, the then president, and called him. Eventually, we scheduled a Zoom and he apologized and promised to rectify the situation. He never did despite my periodic reminders. Later, I was told by a friend on the Corporation Board that when President Gay took office she would resolve the issue. A few months ago, I was told that progress was being made and we were close to a resolution. Unfortunately, the stock sale issue has never been resolved and nearly three years have gone by. And it should not have been hard for Harvard to resolve this problem. All Harvard has to do is honor the agreement it had made with me. That is, to grant me the right I bargained for: The right to allocate the $70m of excess proceeds to the Harvard-related initiative of my choice. And this should not be hard. Harvard has $50,000,000,000 of assets, and Harvard's obligation to me represents only 0.14% of these funds, and the funds all stay at Harvard. The bad news is that Harvard has still not fulfilled its contractual obligations to me. The good news is that I now have new ideas for how the funds should be allocated. Harvard has problems that I was unaware of until recently. Sometimes money can help fix problems. To be extremely clear, my advocacy on behalf of antisemitism, free speech on campus, and my concerns with DEI at Harvard have absolutely nothing to do with my unfortunate experience as a donor to the University. I can understand why perhaps Harvard would like to characterize my recent initiatives as due to resentment, but I have no resentment toward Harvard now, nor at any time. I am extremely grateful for the education I received at Harvard College and HBS. I am just trying to make sure that current students and those in the future have the same opportunity to learn at Harvard that I had. I am, however, very disappointed with how Harvard mishandled a donation and the related investment, and lost out on $75m of philanthropic capital plus earnings on that capital since August of 2021. But that is a total sideshow to the serious concerns I have about Harvard's leadership, and now, Harvard's governance, in light of how the Board has handled the President Gay situation and the eruption of antisemitism on campus. For those of you who have a better call into the Corporation Board than I, please ask them not to forget that we have another issue that remains unresolved.