It is said that imitation is the sincerest form of flattery.
The most obvious and knocked-off element of Yale’s strategy is its radical bet on private markets. When Swensen left Wall Street and took over Yale’s endowment in 1985, nearly three quarters of the $1 billion portfolio was invested in U.S. stocks, bonds, and cash, according to the organization. Three decades later, Yale’s $30 billion endowment trails only Harvard’s in size, and traditional domestic assets make up less than one tenth of the portfolio. That capital goes instead to funding leveraged buyouts and venture capitalists, to buying natural resources and real estate, and to hedge fund managers. And where Yale’s portfolio has gone, America’s endowments and foundations have followed.
What many outside of the endowment world do not realize is that Swensen did not work alone.
Take Dean Takahashi ’80 B.A., ’83, for example. He took a job with the Yale University Investments Office in 1986, two and a half years out of SOM and just shy of a year after Yale’s now-legendary chief investment officer, David Swensen ’80 PhD, arrived there. “When I started,” Takahashi says, “Yale had a billion and a half dollars, and we’ve now generated more than $40 billion of gains since then.” Over those 32 years, Swensen, Takahashi, and their colleagues have generated returns of 12.8% per annum—a record unequalled among institutional investors.
Post by Marcelino Pantoja