The University of Chicago, renowned for producing world-leading research in economics and finance, is selling a prized research centre as it struggles with heavy debt and lacklustre endowment returns.
Proceeds from the $375mn sale of the Center for Research in Security Prices — founded in 1960 by two UChicago professors — would be added to the university’s endowment and invested to boost returns, a spokesman said.
The transaction, expected to close in the fourth quarter, comes after UChicago last month announced $100mn in spending cuts and plans to suspend or scale back several PhD and graduate programmes in an effort to rein in a deficit that ballooned to more than $200mn in recent years.
UChicago is known for its “school of economics” — an economic approach centred on neoclassical price theory and the belief that free markets are more efficient than government regulation. The university has produced some of the finest minds in the history of finance and economics, including Myron Scholes, who developed a groundbreaking model for options pricing, Eugene Fama, who created a leading framework for analysing portfolio returns, and free-market economist Milton Friedman.
“The fact that they have to sell a celebrated part of the university now is very telling of how poor their fiscal situation is,” said Hunter Lewis, co-founder of Cambridge Associates.