The article below explains that Yale’s CIO, David Swensen, is “one of the world’s most savvy investors.” At InvestableBenchmarks.com, you can follow Swensen’s ETF portfolio prescription which has delivered roughly 8% annually this past decade.
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Universities Look to Yale for Investment Managers
David Swensen’s success managing Yale University’s endowment spurs other colleges to hire his apprentices
Timothy W. Martin, 4/29/15
When hiring an investment chief, wealthy universities prefer something more specific than an Ivy League pedigree.
They ask: “Is there anyone at Yale?’” said endowment recruiter David Barrett.
The demand for Yale University talent within the endowment world is a product of the success of David Swensen, manager of Yale’s money for the last three decades. Mr. Swensen has earned a reputation as one of the world’s most savvy investors with an unconventional approach that favors hedge funds and private equity over stocks and bonds. His annual return of 14.4% since 1985 has handily topped the S&P 500’s 8.5%.
Universities looking to match Mr. Swensen’s record and mimic his strategies are turning to his protégés for help. Four of the nation’s 10 wealthiest schools have a former pupil of Mr. Swensen in charge following Stanford University’s hiring last month of ex-Yale investment manager Robert Wallace. According to a Wall Street Journal analysis of data provided by the National Association of College and University Business Officers and Commonfund, which tracks 832 schools, more than $1 out of every $6 held by U.S. higher-education endowments covered by the data is controlled by either Yale University endowment chief David Swensen or his protégés.
Princeton University, the University of Pennsylvania, Bowdoin College, Wesleyan University and the Massachusetts Institute of Technology all benefited from hiring one of Mr. Swensen’s students, as their assets doubled and returns bested a benchmark of other U.S. endowments by at least a full percentage point, according to a Wall Street Journal analysis of data provided by the Wilshire Trust Universe Comparison Service, the schools and endowment recruiter Charles A. Skorina & Co.
The prevalence of Swensen acolytes in leadership posts highlights how dominant the Yale investment model has become among major U.S. universities. Colleges and Universities ended 2014 with 51% of their portfolios invested in less-traditional fare like hedge funds, private equity and real estate that Yale favors – nearly double the allocation to those investments in 2001, according to annual surveys done by Nacubo and Commonfund.
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