I wonder what the ratio of investments to alumni is versus non alumni. Are the returns coming from the people that were educated there? That’s the real test!
This strategy has done SOOO well. Question I have is how solid is the book valuation of illiquid assets—and also what happens in a downturn? In 1987, most of Yale’s portfolio—90%— was allocated to marketable American securities, like public stocks, bonds, and cash. Today only 10% of its endowment is invested in these kinds of assets. The rest is in hedge funds, private equity, foreign stocks and real estate.
The Ivy endowments led by Yale have dramatically outperformed the market creating billions to support higher learning and research. You need to measure this over much longer time frames, which is exactly the point. They’ve estimated that all of the Yale endowment is due to outperformance by David Swensen.
Columbia's old fund manager, Narv Narvekar, was quite conservative when it came to diversifying the portfolio of the endowment. He actually kept a lot of cash on hand to do quick (as in multi-quarter) investments and have a limited pool into alternative investments. I was fortunate enough to work with him a bit during my college days in the University Senate.
His style ended up making Columbia one of the most successful endowments by returns...and getting poached by Harvard. Argh.
This is some how disturbing and unsettling for those aspiring to send their wards to the Ivy League colleges with the prospect of sub-standard educational services.
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