David swensen calls his running of the yale endowment a labor of love. This is the portfolio david swensen manager of the yale endowment recommends for individual investors in his book unconventional success. At yale, where he produced an unparalleled twodecade investment record of 16. Princeton looks to break up the white male money monopoly. The funds reputation, however, owes to its earlier accomplishments. Swensen is the chief investment officer of yale university and the bestselling author of pioneering portfolio management. Universitywide policies, procedures, forms, and guides communicate yales expectations of its community members, enhance operational efficiency, mitigate risk, and support compliance. Like a true endowment fund, the income generated by the gift may be spent. David swensen made yale fabulously rich and changed. Moskowitz and financial certification specialist and program director jim dobbs, includes comprehensive coverage of the topics and learning objectives found in the cima certification detailed content outline. News of outstanding returns on yales endowment came as the universitys chief investment officer was already riding a wave of favorable publicity. However, unlike a true endowment, the principal may be spent, but not unless or until the conditions under which the donor has specified that it may be spent have been met. Under his leadership, yales endowment has generated an astonishing 20 consecutive years of positive returns, from 1988 to 2008. Underwater endowment a fund whose market value is less than its historic book value.
Lisa received a bachelor of science in molecular biophysics and biochemistry from yale college and an m. He has been the chief investment officer at yale university since 1985. Yale university recently released their 2017 annual report for the yale endowment, and while normally this would pass without much notice they appear to have made a few waves by continuing an ongoing feud with warren buffett. Its known for many great things, but in the investment world, its probably best known for its top performing endowment, which. Here is historical performance data from the yale endowment report. Given his incredible track record, many individual investors have wanted to follow his investing advice for their own portfolios. Swensen, cio of yale university and the author of pioneering portfolio management. Yale is among the finest learning institutions in the world.
Always a fun read, and this year they dive into their successful pe. 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 league college endowment performance figures. The money management gospel of yales endowment guru the. The universitys chief investment officer for nearly 35 years, swensen has raised an entire generation of endowment cios in his image, and explained yales strategy to the world in his hit book. Rekenthaler report three lessons from yales endowment fund everyday investors will not wish to copy the famed pension funds, but they can pick up some tips. I enjoyed this book from david swenson from the yale endowment. In the subsequent three decades, he has produced superlative returns including a 20year winning streak of positive returns from 19882007. One portfolio with an impressive 20year average annual return of 11.
Morningstars john rekenthaler shared a wild statistic about yales endowment fund in a piece published yesterday. Heres his ideal indexed portfolio for retail investors. During his tenure, it has achieved an annual compound growth rate of. Yale endowment earns 22 percent, as investment steward. The man who conquered yale is now taking on climate change. The money management gospel of yales endowment guru. Yale money whiz shares tips on growing a nest egg turmoil in the stock market has people on edge, but yales investment guru, david swensen, explains how. I initially was enamored with the endowment investing model. Yale also has less than half the allocation to fixed income at 4. Yale universitys largest holding is jbg smith properties with shares held of 569,754. Engagement with yales managers is a powerful tool through which the university influences the character of the endowment. But in a bloomberg report, tim keating of keating wealth management said that the yale endowments returns have probably received a boost from its investments in leveraged buyouts and venture capital.
The yale school of management, also known as yale som, is a worldrenowned business school that offers mba, emba, mam, mms, phd, executive education, and joint degree programs. The letter follows another letter swensen wrote to the yale community in 2016 offering a first progress report on an effort the investments office began in 2014 to give climatechangerelated guidance to yales external investment managers, who collectively manage nearly all of the endowment portfolio. The most influential endowment manager just jumped into crypto with bets on two silicon valley funds. The plan has been implemented through yales external managers, who collectively are responsible for managing nearly all of the universitys endowment assets. When yale needed a new endowment manager in 1985, brainard, then the university provost, recommended swensen. 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. The most influential endowment manager just jumped into. David swensen is one of todays best endowment managers, if not the best. In 2005, swensen wrote a book called unconventional success, which is an.
In his 2016 investor letter, buffett criticized how university endowments pursue marketbeating returns through active management and suggested they might. The mammoth yale endowment fund run by david swensen has been a. A fundamental approach to personal investment free press, and. In 2014, the yale investments office developed a plan to address climate change risks in the endowment portfolio. We work hard to shape partnerships that reward both yale the contributor of capital and the investment manager the contributor of expertise. Swensen is responsible for managing and investing yales endowment. Swensen born 1954 is an american investor, endowment fund manager, and philanthropist. How the yale model ate endowments and everything else. But he was smart, and analytical, and willing to challenge conventional wisdom. Bottom line, he emphasizes his competitive advantage of access to toptier vc and pe that very few have access to. At the yale school of managements summer school for chinese executives, the. In the 10 years from mid2008 through mid2018 the latter being the date of the funds most recent report, yale gained an annualized 7.
The yale endowment 2015 a look at the 30year performance. By extension, the yale investment office is often held up as the benchmark for asset management, circa 2012. The 10 best university endowment managers business insider. For complete contact details for the yale university endowment fund investment staff please access your copy of our endowment database.
Swensens book is a mustread for endowment managers and other institutional investors, particularly those who take a fundoffunds approach as does yale. David swensen, yales chief investment officer and manager of the universitys endowment, discusses the tactics and tools that yale and other endowments use to create longterm, positive investment returns. He serves on the boards of tiaa, the brookings institution, carnegie institution, and hopkins school. Hes the money manager who for 34 years has been in charge of the endowment the. Duke and yale each did almost as poorly as harvard. The man behind that investment success is david swensen, one of the. Swensen reaffirms climate change as a guiding factor in. For the two decades after swensen took over as manager of yales endowment in 1985 just five years after hed gotten his economics ph. Yale school of management educating leaders for business.
Yale finance guru out front of rocketing endowment growth. Investment management theory and practice is an online course for investment professionals pursuing the prestigious cima certification. Nearly all major colleges, including ivy league schools like harvard, yale, princeton, and mit, run some of the largest and most successful endowments in the. David swensen has built yales exceptional endowment returns largely. His advice to the individual investor is really good, backed by plenty of academic research. Why the yale model of investing doesnt work for everybody. These include evaluating the role of the endowment, portfolio choice, manager choice, socially responsible investing and alternative asset class investing. David swensens guide to sleeping soundly features yale alumni. David swensen is manager of yale universitys endowment fund where hes generated returns in the range of 16% annually the past couple decades. David swensen took over management of yales endowment in 1985. I read david swensons book, unconventional success, a fundamental approach to personal investing. Yale study links diabetes drug to poor heart health. During his fourteen years as yales chief investment officer, david f. We work carefully with each of our investment managers to structure a partnership that fits the funds strategy and time horizon.
View all policies, explore by topic, or learn more about developing policies and procedures. For yales money man, a higher calling the new york times. As a result, his investment style has been emulated by many other university endowments. He emphasizes the importance of asset allocation and diversification and the limited effects of market timing and security selection. D at yale, this worked spectacularly well with a 16.
Three lessons from yales endowment fund morningstar. As for cash, yale keeps only a small amount of it0. Background on the yale university endowment fund yale university uses a very specific model when it comes to investing for their endowment fund, this is known as the yale model. Yale advantages is an employee discount program that gives eligible staff members the chance to save money on many daytoday goods and services. Yales money guru shares wisdom with masses in the 21 years hes managed yale universitys investments, david swensen has made an average. She focuses on the endowment s foreign equity investments, both marketable and private. The course will focus on the process of endowment management and the specific challenges facing the institutional funds manager. Yale selected a manager with little or no track record. Cios in his image, and explained yales strategy to the world in his hit book. Hes the money manager who for 34 years has been in charge of the endowmentthe. Soo does the manager of the yale endowment, david swenson. Theeasily misunderstood yale model institutional investor. Swensens book is a mustread for endowment managers and other. An endowment is a donation of money or property to a nonprofit organization, which uses the resulting investment income for a specific purpose.