Business

Yeshiva University in $1B hole as risky investments fizzle

Yeshiva University didn’t learn its lesson.

The oldest Jewish university in the US has been plundering its own endowment for about a decade in order to invest in riskier hedge funds — and now finds itself in a $1 billion hole as those bets have soured, according to a report.

Half of the billion-dollar boondoggle comes from the soured investments — while the rest came from debt piled up as the university borrowed money to cover operating deficits, the report found.

The giant $1 billion “loss” is about 10 times the loss it suffered at the hands of Ponzi scamster Bernie Madoff.

Facing such a financial dilemma, Yeshiva, founded in 1886 — the same year the Statue of Liberty opened — could have a hard time surviving, some have said.

The trouble started for the school when, in 2003, it nearly doubled its endowment’s allocation to hedge funds, according to the report by the Web site Takepart.com and The Jewish Channel.

It raised the money by selling US Treasury bonds, generally considered an almost risk-free investment.

By 2008, alternative investments had grown to more than 80 percent of Yeshiva’s total endowment.

“This Board appears to have been heavily conflicted and also may have disregarded the advice from its professional advisers,” Andrew Sole, a member of the Class of 1999 at Yeshiva University’s Cardozo School of Law, told The Post. “The consequences of the Board’s apparent inattention may very well prove to be catastrophic to this distinguished educational institution, and the questions raised may need to be answered by an independent investigation, perhaps by the NYS Attorney General.”

The article is backed up by a March report from credit rating agency Moody’s, which has downgraded Yeshiva’s debt to junk status.

“The negative outlook incorporates the need for Yeshiva to implement swift plans to reduce deficits and grow liquidity in order to continue operations,” according to the latest Moody’s report.

If it wants to have enough cash to meet operating expenses — or not face default — it could sell its real estate in Manhattan and The Bronx, Moody’s said.

The university denies the information in the report, which was written by Steven I. Weiss.

“A YU education is deeply valued and desired — witness our 16 percent increase in first-time undergraduate student enrollment over the past two years — and there is no question that the University will be here for generations to come, fulfilling its unique and vital mission as it has for more than a century,” said Matthew Yaniv, a Yeshiva University spokesman.

In a separate statement, Yaniv said Weiss’ report had “half-truths and inaccuracies,” but declined to give any specifics.

“Every single aspect of the story is drawn on actual documents that are either on Yeshiva-produced audits or internal Yeshiva communications or sworn testimony given by Yeshiva board members past and present,” Weiss told The Post.

He said Yeshiva hasn’t requested a correction to the story.