The most prominent highlight of the "Yale model" is the redefinition of various asset classes. According to the concept of asset allocation, it is rebalanced every year to ensure that in the ever-changing time and investment environment, it can constantly pursue the alpha of investment income, rather than the beta of market benchmark.
In the past, in order to ensure low risk and stable income, university endowment funds mainly relied on fixed income investment. On the other hand, Svencen advocates that universities should increase their investment in stocks and alternative assets, such as hedge funds, private equity, venture capital and real estate, and should not be limited to bonds. At the same time, by investing in overseas assets, Svencen greatly reduced the dependence of the endowment fund on domestic securities in the United States, thus improving the return potential and reducing the volatility.
The rate of return brought by this model is obviously much higher. According to the data of Yale Investment Office, during Svencen's 35-year management career, as of June 30, 2020, the annual return rate of Yale Endowment Fund was 13. 1%, which was 4.3 percentage points higher than that of 60% stock /40% fixed income portfolio.
David Svencen, chief investment officer of Yale University, died.
On Wednesday (May 5th), local time, legendary investor David Svencen, who served as the chief investment officer of Yale University for a long time, died of cancer at the age of 67.
Svencen 1980 graduated from Yale University with a doctorate in economics, and then worked briefly in Lehman Brothers and salomon brothers, a wall street investment bank. 1985 returned to Yale University as the head of the investment office of Yale University and took over the Yale Endowment Fund.
John Berg, the founder of Pilotage Group, once commented: "David Svencen is one of the few investment geniuses on this planet." Barton Biggs, former chairman of Morgan Stanley, once said, "There are only two truly great investors in the world, and that is David Svencen and Buffett."
David Svencen not only created outstanding investment performance, but also delivered a large number of excellent fund managers to the investment community. It is particularly noteworthy that Zhang Lei, one of the biggest investors in China, is David Svencen's favorite pupil.