What State Budgets Cut First Tells You Everything
When states cut arts funding, it’s a signal of deeper budget stress. Here’s how you can rotate into resilient federal and private sectors before the next fiscal knife falls.
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Markets and Policy
Harvard’s Problem Is Your Opportunity
Political pressure on universities, weak private markets, and tough new M&A rules are converging to push universities, private equity, and venture capital to the only funding path left open for them: IPOs. Here’s how you can position.
By Austin Payne
Harvard University is reportedly in advanced talks with the White House to settle a standoff that froze hundreds of millions in federal research funds. The deal, which echoes Columbia’s recent $200 million settlement, would restore government grants and stabilize Harvard’s financial pipeline.
University Endowments Run Through PE/VC
Political pressure is more than a campus story. Harvard is one of the world’s most powerful institutional investors. Its $50 billion endowment is a cornerstone partner and backer for private equity and venture capital.
Beyond Harvard, university endowments are critical fuel for private markets. Over 600 institutions hold about $800 billion in assets, and much of the capital is committed as Limited Partnership stakes in private equity and venture capital.
And at this time, the private market picture is grim. Private equity returns are down, regulators are cracking down on acquisitions, and venture capital is crowding into fewer sectors. So, even if the courts remove the political pressure on the universities, Harvard is exploring investment cuts of about $1 billion because of PE’s lackluster results, and Yale is preparing a $6 billion divestment.
If political pressure or poor investment returns force universities to tighten their belts, the private markets skip a meal. Less capital flows in, and late-stage startups face shrinking capital pools and lose a key source of oxygen. So, the private market industry is looking for a solution.
Demand, M&A Bottled Up and a Solution Emerges
During this endowment pullback, liquidity demand by the private markets is strong. Secondary market trading hit a record $102 billion in Q1 2025, up 41% year over year. Investors are eager to rotate out of locked-up positions in private firms. However, the mergers and acquisitions path is harder than it used to be. Tighter FTC and DOJ scrutiny has slowed merger approvals, cutting off another traditional exit path.
That shrinks the menu for startups: their options are to stay private and accept down rounds where founders’ positions are liquidated, or go public and tap capital markets. Since AI is sucking up the lion’s share of venture dollars, many firms in other industries are choosing the latter option.
All this is converging to push the industry to the one exit lane left: IPOs, which offer clean exits and price discovery.
Historical Cycle Patterns
IPO waves tend to follow dry spells. After a muted 2022–2024, the IPO landscape resembles past cycles where regulatory bottlenecks and liquidity crunches drove waves of listings. And since banks are reporting stronger pipelines and investor demand is showing up in the secondary market, the next window could open wider than expected.
The IPO Finance Play
IPOs are becoming the “last clean exit” for private capital. Retail investors rarely get such a clear shot at this cycle, but today, you can position early. These two ETFs give direct, accessible exposure to the IPO market:
Bottom Line
IPO and FPX form the core sleeve for capturing the reopening of public markets. This is an opportunistic window for retail investors to step into a cycle usually dominated by institutions.
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