Chapter 2 the yale endowment 17 history of the endowment 18 david swensens ascent 22. I enjoyed this book from david swenson from the yale endowment. But over a 20year period ended june 7, yale pointed out in its release tuesday, the endowment produced an average annual return of 12. Funds snapped up forests as a way to hedge against inflation and. It is not a secret that yale universitys endowment fund, headed by chief investment officer david f. Yale and embraced a new model of investing that relies on radical diversification of endowment portfolios into illiquid, riskier asset classes. Rethinking the management of foundation endowments. Along with harvards pension assets, working capital, and noncash gifts, it is managed by harvard management company, inc. The money management gospel of yales endowment guru by geraldine fabrikant nov. The yale endowment model the success of the yale university endowment under david swensen and his influential book pioneering portfolio management transformed the endowment management world. Yales spending and investment policies provide substantial levels of cash flow to. The money management gospel of yales endowment guru. The socalled yale model is most closely associated with an investment strategy.
Lisa received a bachelor of science in molecular biophysics and biochemistry from yale college and an m. A window in sterling memorial library with a view of the selin courtyard right. The mission of the yale school of management is to educate leaders for business and society. Replicating yales endowment portfolio with accessible. The strategy produced superior returns over the past 15 years and made the yale. The super endowments of harvard and yale of the us endowment funds, frontier places significant emphasis on the asset allocation methodology of the super endowments of harvard and yale.
This group of papers represents a portion of the anson phelps stokes papers which was not discovered until several years after the bulk of the collection had been processed. Mgt 827, endowment management mgt 827, endowment management. Yales spending and investment policies provide substantial levels of cash flow to the operating. Rethinking the management of foundation endowments 7 legislation that is now being debated in congress. Lessons from yale s endowment model and the financial crisis by geoff considine, ph. The addition to the anson phelps stokes family papers consists of correspondence, writings, subject files, memorabilia, photographs, financial records and family papers. His advice to the individual investor is really good, backed by plenty of academic research. The quantitative answer is widely known by readers of swensens book, which explains the process by which the yale endowment has been managed over the past 35 years of deliberate success.
Endowment funds try to invest in only the best money managers utilizing both the public and private markets to find the very best investment opportunities. Over 20 years, swensen estimates that 80% of yales value added is from active management while just 20% is from asset allocation 15 brown, garlappi and tiu, troves of academe. Swensen is the chief investment officer of yale university and the bestselling author of pioneering portfolio management. Bottom line, he emphasizes his competitive advantage of access to toptier vc and pe that very few have access to. Evening view of the yale campus, facing west ris233307 21105 1. For the two decades after swensen took over as manager of. Institutional investors and equity prices, working paper, international center for finance, yale school of management.
Yale university endowment model 20052016 find, read and cite all the research you need on researchgate. Swensen born 1954 is an american investor, endowment fund manager, and philanthropist. Yale s endowment is the engine that drives the university. Yale endowment, often a pacesetter, is a laggard this time. This model is seen as very controversial, as well as it is very difficult to replicate without the correct amount of funding, like those funds that are.
Investing like the harvard and yale endowment funds. That, some say, is when the yale model really went mainstreamand, for better or for worse, became synonymous with the endowment model, inspiring many to attempt to replicate the returns of swensen, yales. It must first be understood in terms of the social purpose. The endowments of most prominent universities suffered terribly, causing many of these institutions to drastically slash budgets and cut. I initially was enamored with the endowment investing model. Generating astronomical annual returns of 28% in 2007,2 as compared to the average 21. At yale, where he produced an unparalleled twodecade investment record of 16. Yales endowment is the engine that drives the university. In the years since the nowclassic pioneering portfolio management was first published, the global investment landscape has changed dramatically but the results of david swensens investment strategy for the yale university endowment have. For at least two decades, yale and its celebrated endowment manager, david swensen, have led a land rush by the richest colleges. Workday is the book of record income, new contributions spend associated wfund. Soo does the manager of the yale endowment, david swenson. An inside look at strategies, players, and practices, edition.
Swensen himself would go on to literally write the book on institutional investingpublishing pioneering portfolio management in 2000. She focuses on the endowments foreign equity investments, both marketable and private. Yale university uses a very specific model when it comes to investing for their endowment fund, this is known as the yale model. In the debate, there is wide agreement on the need for. Attempting to mimic the yale endowment portfolio using. The yale investments office is simply the best in the world. Pdf on jan 6, 2017, mustapha akintona and others published investment management strategy. This performance was better relative to the average for peer universities another impressive year for the yale endowment. Operating expenditures by schoolcategory, 18992000 5. Swensen, has shown remarkable success under his administration. But in this environment, success has very different implications. An indispensable roadmap for creating a successful investment program from yales chief investment officer, david f. The denison model vs the yale model partners capital.
The ivy portfolio shows step by step how to track and mimic the investment strategies of the highly. The yale endowment is famous for its relatively large allocations to nontraditional asset classes such as absolute returns hedge funds, private equity, and private real estate. Swensen convenes his staff including his cadre of apprentices for a morninglong meeting among the gothic revival flourishes and crenelations of the yale university campus to debate investment ideas. April 20, 2010 the devastation caused by the crash of 2008 was not limited to individual retirement portfolios. The instruction manual for the cre ation of proteins is dna. Theeasily misunderstood yale model institutional investor. Lessons from yales endowment model and the financial crisis by geoff considine, ph. In the years since the nowclassic pioneering portfolio management was first published, the global investment landscape has changed dramatically but the results of david swensens investment strategy for the yale university endowment have remained as impressive as ever. View of the beinecke rare book and manuscript library in hewitt quadrangle, from the colonnade of. Yale university investments office national pension commission. How the bogle model beats the yale model a wealth of. Yale universitys endowment, the worlds second largest, grew 12. Yales chief investment officer, david swensen, looked over the hectic scene.
Yale school of management educating leaders for business. Moskowitz and financial certification specialist and program director jim dobbs, includes comprehensive coverage of the topics and learning objectives found in the cima certification. Lecture notes for macroeconomics i, 2004 yale university. David swensen was reluctant to write this book when the idea was first. Stairway in the yale university art gallerys older wing, designed by egerton swartwout b. Endowment spending represented 41% of the operating revenue in fiscal 2010 compared to 45% in fiscal 2009. Yales spending and investment policies have provided substan tial levels of cash flow to.
The yale endowment 2015 a look at the 30year performance. Some of the books are available as pdf files to download and the others have been linked via. International center for finance, yale school of management. Asset allocation, risk budgeting, and investment performance of university endowment funds, journal of financial markets, 2010. Why the yale model of investing doesnt work for everybody. He serves on the boards of tiaa, the brookings institution, carnegie institution, and hopkins school. Pdf pioneering portfolio management kasheeban sureshan.
Lessons from yales endowment model and the financial crisis. Investment management theory and practice is an online course for investment professionals pursuing the prestigious cima certification. The yale model is an investment strategy named after the university endowment that popularized the concept. Its known for many great things, but in the investment world, its probably best known for its top performing endowment, which. I read david swensons book, unconventional success, a fundamental approach to personal investing. The battle of the endowments posted october 20, 2016 by ben carlson i talked to anora mahmudova from marketwatch earlier this week about everyones favorite topic in the institutional money management world lately the ivy. Pioneering portfolio management by swensen, david f. Yale is among the finest learning institutions in the world. Given his incredible track record, many individual investors have wanted to follow his investing advice for. David swensen narrative by sydney finkelstein based on. The yale model outlined in swensens 2000 book pioneering portfolio management involves marrying harry.
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