David Swensen, the pioneering asset manager who developed the “Yale Method” for investing the venerable university’s endowment, has died at the age of 67.
Swensen, a proponent of diversification and early adopter of alternative investments, or those uncorrelated from the stock and bond markets, was well-known for the high returns he was able to achieve. Swensen grew it from $1 billion when he started in 1985 to $31.2 billion in 2020, The Wall Street Journal reports.
“I write with profound sadness to share the news that David Swensen, Yale’s chief investment officer, died yesterday evening after a long and courageous battle with cancer,” Yale President Peter Salovey wrote in a letter to students and faculty. “David served our university with distinction. He was an exceptional colleague, a dear friend, and a beloved mentor to many in our community. Future generations will benefit from his dedication, brilliance, and generosity.”
His ideas reverberated beyond Yale as he “revolutionized the landscape of institutional investing,” Salovey added. “His approach, which has become known as the ‘Yale Model,’ is now the standard for many university and foundation endowments.”
Teaching until the end
As the author of two books (Pioneering Portfolio Management: An Unconventional Approach to Institutional Investment and Unconventional Success: A Fundamental Approach to Personal Investment), he shared his insights and experiences with a wide readership.
Swensen received his Ph.D. in economics from Yale in 1980 and worked for Salomon Brothers and Lehman Brothers before returning to Yale in 1985 to lead the investments office. In the ensuing years, he lectured in Yale College and the School of Management.
Salovey noted that as recently as Monday, Swensen and long-time friend and colleague Dean Takahashi taught the last class of the term for Investment Analysis, a seminar they co-instructed for 35 years.
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
