Yale's $8 Billion Man
Yale's $8 billion man
David Swensen has made better returns for Yale than any portfolio manager at any university. He has a word of advice: don't try this at home. by Marc Gunther '73
July/August 2005
Marc Gunther is author of Faith and Fortune: The Quiet Revolution to Reform American Business and senior writer at Fortune magazine.
Last spring, Yale president Richard C. Levin '74PhD held a cocktail reception for David F. Swensen '80PhD, who was celebrating his 20th year as Yale's chief investment officer. Inside the president's official residence, posters and news clippings mounted on easels tracked the growth of Yale's endowment from $1.3 billion to $14 billion under Swensen's stewardship. The display culminated in a bar chart titled "Value of Key Contributors to Yale University." The names -- Harkness, Sterling, Beinecke, Mellon -- were familiar, and the size of their donations, expressed in 2005 dollars -- $128 million, $151 million, $263 million, $379 million -- were as impressive as the campus landmarks that bear their names. Towering above them was a bar bearing Swensen's name and an astonishing number: $7.8 billion. | Yale's endowment has generated net investment returns that average 16.1% per year. |
No one has named a Yale building after David Swensen -- not yet, anyway -- and it's a safe bet that most students and alumni do not know who he is. Yet Swensen, an unassuming 51-year-old Midwesterner who did his undergraduate work at the University of Wisconsin in River Falls, has arguably made as much of a contribution to Yale as anyone in recent times. That $7.8 billion figure is the difference between the value of Yale's endowment today, after 20 years of Swensen's portfolio management, and what its value would be had the money grown at an average rate of return for all college and university endowments. When Yale is measured against its peers, a group of universities with multibillion-dollar endowments that includes Harvard, Princeton, Stanford,
David Swensen has made better returns for Yale than any portfolio manager at any university. He has a word of advice: don't try this at home. by Marc Gunther '73
July/August 2005
Marc Gunther is author of Faith and Fortune: The Quiet Revolution to Reform American Business and senior writer at Fortune magazine.
Last spring, Yale president Richard C. Levin '74PhD held a cocktail reception for David F. Swensen '80PhD, who was celebrating his 20th year as Yale's chief investment officer. Inside the president's official residence, posters and news clippings mounted on easels tracked the growth of Yale's endowment from $1.3 billion to $14 billion under Swensen's stewardship. The display culminated in a bar chart titled "Value of Key Contributors to Yale University." The names -- Harkness, Sterling, Beinecke, Mellon -- were familiar, and the size of their donations, expressed in 2005 dollars -- $128 million, $151 million, $263 million, $379 million -- were as impressive as the campus landmarks that bear their names. Towering above them was a bar bearing Swensen's name and an astonishing number: $7.8 billion. | Yale's endowment has generated net investment returns that average 16.1% per year. |
No one has named a Yale building after David Swensen -- not yet, anyway -- and it's a safe bet that most students and alumni do not know who he is. Yet Swensen, an unassuming 51-year-old Midwesterner who did his undergraduate work at the University of Wisconsin in River Falls, has arguably made as much of a contribution to Yale as anyone in recent times. That $7.8 billion figure is the difference between the value of Yale's endowment today, after 20 years of Swensen's portfolio management, and what its value would be had the money grown at an average rate of return for all college and university endowments. When Yale is measured against its peers, a group of universities with multibillion-dollar endowments that includes Harvard, Princeton, Stanford,