https://news.yale.edu/2021/05/06/self-c ... s_5-7-2021
A couple of things stood out to me. One is that he graduated from a relatively little-know regional college and was able to have tremendous success high finance. The second is that he was able to generate such strong returns over a very long period of time at a place that normally requires relatively conservative investing.‘Self-confident yet selfless’: Yale’s David Swensen dies at 67
Raised in Wisconsin and a graduate of the University of Wisconsin-River Falls, Swensen first came to Yale in 1975 as a graduate student in economics. He worked especially closely with the late Nobel Prize-winner James Tobin and with William Brainard ’62 Ph.D., now the Arthur Okun Professor Emeritus of Economics. Together they advised Swensen on his doctoral dissertation, which examined the valuation of corporate bonds and yielded valuable data for Tobin’s work on company valuations.
After earning his degree, Swensen worked for Salomon Brothers and Lehman Brothers, where he pioneered the development of interest rate swaps. Brainard meanwhile became Yale’s provost, and in 1985 he hired Swensen to manage the Yale endowment.
Over Swensen’s 35-year stewardship, the Yale Endowment generated returns of 13.1% per annum through June 30, 2020, outperforming the Cambridge Associates mean by 3.4% and a traditional 60% stock/40% fixed income portfolio by 4.3% per annum. In dollar terms, Yale’s performance during Swensen’s tenure translates into gains of $45.6 billion, with $36.0 billion in value added relative to the Cambridge Associates mean. The endowment is now more than $31 billion in assets, and spending from it covers about one-third of the university’s budget.
For most of my investing life, I have been a boogleheader by stuffing money into low cost mutual fund and letting it sit forever, but am intrigued about how Mr. Swensen was able to generate these types of returns. Since I hopefully have another 35 years of investing to look forward to, any ideas or suggestions?