Universities and private equity.
Victor Fleischer points out that "Last year, Yale paid about $480 million to private equity fund managers as compensation," while only spending about $1 billion of its endowment on operations, of which "only $170 million was earmarked for tuition assistance, fellowships and prizes." (Disclosure: My wife works for Yale, though not as a fund manager.) He thinks that this is self-evidently bad, and you can see his point, but of course the private equity managers had a better year. Or I don't have the actual data for the year, but "over the past 20 years, under the brilliant guidance of its chief investment officer, David F. Swensen, Yale’s private-equity portfolio earned an astounding 36 percent per year." The private equity managers run about $8 billion of Yale's endowment; take 36 percent of that and you get an expected return to Yale from the private equity managers of almost $2.9 billion. Meanwhile "in 2014 Yale charged its students $291 million, net of scholarships, for tuition, room and board." Yale spent almost three times as much money on private equity managers as it did on students, but the private equity managers gave Yale almost ten times as much money as the students did. And Yale didn't need to feed, house or teach them. "Time for Yale to shed the declining legacy educating business," says Malcolm Gladwell.