February 05, 2018

Role Models: David Swensen

Russ Zalatimo
Written by: Russ Zalatimo

By: Russ Zalatimo 


Role Models: David Swensen

Role Models is a series dedicated to those individuals who are pushing their passions forward in the world of business and beyond. From well-known figures to everyday success stories, we will highlight their achievements as we work to inspire our everyday lives.


To discuss the work of David Swensen would also bring to light an understated aspect of Universities across the world. More than just educational institutions, Universities are also pillars of alternative investments, as their stakes in diverse real estate and other securities account for a significant chunk of their capital gains. As for Swensen, he’s the man behind Yale University’s investment funds as well as the Ivy League’s endowment assets—serving as Yale’s Chief Investment Officer. A veteran of Wall Street in the early ‘80s, Swensen served as Senior Vice President of Lehman Brothers before joining Yale in 1985.


His work within the renowned institution spans far greater than the $25.4 billion in investments earned (as of September 2016). Swensen also spearheaded The Yale Model along with YIO’s Senior Director Dean Takahashi. That theory was later benchmarked by the greater investment world and became known as the “Endowment Model,” which are investment streams that extend beyond the traditional paradigm (also known as alternative investments). That move toward alternative investments has been referred to as the “Swensen Approach,” so if you’ve heard the lingo before, then you now know its origin. Swensen moved the University into more non-traditional, and the results have been fruitful. Yale’s annual budget is over three billion dollars—with money from tuition, donations, and a billion dollars in endowments. Meaning, Swensen’s funds account for a third of Yale’s budget. With a PhD in Economics from Yale, Swensen not only helps his alma mater to grow, but also constantly learns from it. His books Unconventional Success: A Fundamental Approach To Personal Investment and Pioneering Portfolio Management: An Unconventional Approach to Institutional Investment have been used by other Universities worldwide.


However, this is more than just a rundown of the achievements of David Swensen. Sure, his work is forward-thinking by nature, and perhaps some of the most forward thinking as it pertains to traditional institutions. But what we can actually glean from Swensen’s trajectory is an unwavering goal to try new things. Oftentimes when it comes to business and investments, we are attached to tried and true means of achieving consistent goals—neither falling behind nor moving forward. Swensen’s dynamic approach to changing how Yale invests has transformed the University from a world-dominating house of education to a landmark of success in the investment world. After all, one can’t teach about the fundamentals of business without having a track record to prove their knowledge, and with David’s help, Yale has that advantage over many other institutions worldwide.


Sometimes a non-traditional route can bring great reward, and Swensen is proof that the pursuit of passion can go a long way.

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