The endowment value increased from $27.2 billion on June 30, 2017, to $29.4 billion on June 30, 2018. 2015 Press Release. Three core ideas inform his thinking.1. Have a confidential tip for our reporters? (Full disclosure, I’m a Yale graduate.) The Family Office Club is the #1 largest membership-based community of family office professionals. [4][5] Since 1985, the Chief Investment Officer of Yale has been alumnus David Swensen. According to him, Yale’s portfolio was overly conservative and under-diversified upon the beginning of his supervision. Mr. Swensen is notable for inventing The Yale Model, which is based upon the principles of Modern Portfolio Theory. 2019 Press Release . More top schools will post returns in coming weeks. Contrary to standard academic theory, which suggests that savers should invest in broad indexes and avoid fees, market imperfections create opportunities for talented money managers. Partially, this can be explained by the addition of uncorrelated assets to the portfolio: its variance of returns was actually reduced by the expansion of classes. Yale University campus in New Haven, Connecticut. Contact Details: For complete contact details for the Yale University Endowment Fund investment staff please access your copy of our Endowment Database. [2][3] The endowment was established at Yale University, then Yale College, in 1718 from an initial fund of £562 provided by Elihu Yale and has grown to more than $30 billion in value over the ensuing 300 years. 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.
[8] In the 1990s it invested in Google and Amazon and was later an early investor in Facebook, LinkedIn, and Airbnb. In 1718, Elihu Yale sold a portion of his collection of gems and furniture to provide an initial fund of £562 for the establishment of the school's endowment. An index of international stocks lost money in the year ended June 30, while U.S. equities rose. (Source). Yale, led by chief investment officer David Swensen, had a sizable allocation of its fund in foreign equities in 2018, at 15.3%, as did other big endowments. With over 1,500 registered family offices we have more billionaire family offices, centimillionaire families, and single family office members than our top two competitors combined. 3. Although these measures helped reduce market risk, assets as a whole seemed to not have been performed adequately and efficiently over the long-term. It is managed by the Yale Investments Office. Most of Yale University’s funds come from donors giving for specific areas within the university.
The fund was highly exposed to domestic equities and fixed-income securities. [12][13] Others have said the salaries of endowment managers are justifiable, asserting that they are less than what could be earned in the private sector and pay for themselves with the endowment's high rates of return. [6], As of September 2019, the endowment was valued at $30.3 billion. Swensen was an early investor in private equity, which helped drive long-term returns. Each year, the Investments Office distributes a press release on investment performance and publishes an update on the Endowment. Brown University ranks at top with 12.4% gain in fiscal 2019, Several rival schools will report investment results soon.
Those already reporting are below. 1) The Yale University endowment is lowering the percentage of assets dedicated to private-equity investments for the first time since 2005. Endowment Reports. Yale’s private-equity portfolio has generated a 14.4% annualized return in the past decade, ranking it as one of the endowment’s best investments, according to a preliminary report issued in September. We provide endowment funds with buy-side co-investment and direct investment deal origination services, outsourced chief investment officer selection help, and also provide Endowment 500 research and Endowment Database Solutions. 2016 Press Release. The school, whose pioneering investment strategy has been widely copied over the years, posted a 5.7% return in fiscal 2019, according to a statement on Friday. The following chart illustrates the change in asset allocation over the last three decades. The endowment has strong long-term results: It’s returned 11.1% over the 10 years through June and its value nearly doubled from $16.3 billion. Source – The Yale Investments Office
Yale Investments Office declined to comment on the moves through a spokesman. Spending from the endowment -- which is the largest source of revenue for the university and supports faculty salaries, student scholarships, and other expenses -- for Yale’s 2020 fiscal year is projected to be $1.4 billion, representing approximately 34% of the school’s net revenue. Over a 30-year timeframe, the returns are even higher and stand at 12.9 percent. [10][11], Beginning in the early 2000s, some criticized the size of compensation given to the endowment's managers. In December 2018, after years of criticism from campus fossil fuel divestment groups, Yale University arrested 48 student activists for staging a sit-in at the Yale Investment Office to protest Yale’s holdings in the fossil fuel industry and Puerto Rican debt. Before it's here, it's on the Bloomberg Terminal.
The endowment, with $30.3 billion in assets as of fiscal 2019, is among the biggest in the U.S. Yale’s target allocation for fiscal 2020 adds more to venture capital, at 21.5% of the fund, and lightens up on foreign equities and hedge funds strategies.
The small amount of funds left over are invested in by the Yale endowment fund to continue to grow the funds that have already been obtained. Read about Harvard’s performance as it revamps its endowment. It is managed by the Yale Investments Office. The Yale University endowment (valued at $30.3 billion as of 2019) is the world's second-largest university endowment, after the Harvard University endowment, and has a reputation as one of the best-performing investment portfolios in American higher education. 2. All Rights Reserved. [15], world's second-largest university endowment, List of colleges and universities in the United States by endowment, "Investment return of 5.7% brings Yale endowment value to $30.3 billion", "Yale Endowment Blasts Low-Fee Critics, Says Gains Would Lag", "The Money Management Gospel of Yale's Endowment Guru", "Investment return of 3.4% brings Yale endowment value to $25.4 billion", "How to invest like ... Yale University's £20bn fund", "What Yale Invested in to Almost Double Its VC Dollars Every Year", "As Budget Woes Grow, Some Want To Tax Yale's Endowment", "Tax Yale's Endowment? Good Luck With That", "Yale endowment chief Swensen's pay falls to $4.2 million in 2015", "YPD arrests 48 people at divestment sit-in", "Yale sells 99 percent of Antero holdings", Yale Investments Office - Yale University, https://en.wikipedia.org/w/index.php?title=Yale_University_endowment&oldid=964813489, Creative Commons Attribution-ShareAlike License, This page was last edited on 27 June 2020, at 18:56.
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