BEVERLY HILLS (Reuters) -Billionaire investor Bill Ackman on Tuesday said Harvard University, one of the nation's oldest and wealthiest, should not be entitled to taxpayer funds when the school wastes money on what he calls "administrative bloat."

Ackman, who earned undergraduate and business degrees from Harvard more than three decades ago, was speaking hours after the Trump administration said it was freezing future grants to Harvard.

He also criticized the school's investment policies, saying the Ivy League university is facing a financial crisis and that its $53 billion endowment is "poorly invested."

"They have lost all future grants, their tax exemptions are at risk," Ackman said on a panel at the Milken Institute Global Conference where 5,000 financiers, educators and scientists gather to discuss critical issues of the day.

"It is all self-induced gross mismanagement and I think that the (Trump) administration is doing precisely the right thing now," Ackman told the packed room.

The U.S. Department of Education informed Harvard on Monday that it was freezing billions of dollars in future research grants and other aid until the university concedes to a number of demands from the Trump administration, a senior department official said.

Harvard responded that the administration letter doubles down on demands that would impose "unprecedented and improper control" over the university and makes new threats to "illegally" withhold funding for lifesaving research.

"The notion is the federal government money is only going to fund breakthrough research, that is just false," Ackman said.

A representative for the university was not immediately available for comment and a representative for Harvard Management Company, which invests the endowment, declined to comment.

Ackman has long been at odds with Harvard, criticizing the university for not doing enough to protect students from antisemitism. Early last year he launched an unsuccessful bid to get four candidates on the ballot for a governing board.

The financier runs New York-based hedge fund firm Pershing Square Capital Management and has been a vocal supporter of Trump's policies on tariffs and spending. Harvard is "a collection of buildings, nice real estate" located in Cambridge, Massachusetts next to the Charles River, he said.

But its cutting-edge faculty, researchers and students could easily move elsewhere, he said. "This is the best time in history to start a university."

He also again hit out at the school's governing board, saying it has become insular and that there is no mechanism to remove members the way there is in corporate America where investors can run board challenges.

"What happens when you have a board that can self-appoint itself, and it becomes insular, and with a $53 billion endowment, they think, okay, we can just do whatever is on our mind."