Yale CIO David Swensen on Fund Managers

“We want people who are maniacally focused on beating the markets, generating superior investment returns. That’s an incredibly important distinction because, think about it, if what you want to do is get rich, you can put together a reasonable investment record and then raise staggering amounts of money.

Size is the enemy of performance. So that staggering amount of money then impairs the fund managers’ ability to continue generating excellent returns, but they can stay in business and collect the fees that they get for having this huge pile of money.

The type of manager we’re looking for is somebody who strives to generate excellent returns and they’ll frequently raise modest amounts of money and close to new investors, measuring their success by beating the market not by generating huge flows of fees for themselves.”

David Swensen gave a lecture on endowment management as the financial crisis unfolded back in 2008.

Open Yale Courses: Econ 252, Financial Markets (2008), Lecture 9

Post by Marcelino Pantoja