Portraits of Excellence: Finance

Portraits of Excellence: Finance 

On the pages of Worth Magazine

THE EDUCATOR  :  David Swensen  :  Chief Investment Officer, Yale University

It has become fashionable for social critics to bash the multibillion-dollar endowments of America’s wealthiest universities. This is nonsense. Though it induces envy, the wealth of schools such as Yale, Harvard and Stanford has made these universities a magnet for students from all over the world, facilitated a vast expansion of knowledge and economic growth, and opened the doors of higher education to students who could never otherwise afford it.

Some of this wealth is thanks to people who give money to universities. But more of it is due to David
Swensen, who earned a PhD in economics from Yale, worked on Wall Street for a few years, and has overseen investment strategy for the Yale endowment since 1985. Abandoning the university’s conservative mix of stocks, bonds and cash, Swensen invested in illiquid alternative assets such as real estate, oil and timber. Since Swensen took over, Yale’s endowment has averaged an astonishing 13.7 percent annual return, and Swensen acolytes—and former employees—now staff the investment arms of universities across the country.

At Yale, Swensen told Worth, “I’ve got the excitement and the intellectual interest of the financial market, and I can do that in the context of serving one of the world’s greatest institutions.” Swensen’s service is enriching not just Yale, but also the world.