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February 17, 2007

Profile of Yale's David Swensen: Money Man on a Mission

Great profile of Yale's David Swensen in the Sunday NY Times. Almost certainly among the best portfolio managers alive, Yale's Swensen has turned in consistent best-in-class returns managing Yale's endowment -- 22% in 2006 alone -- despite it growing from $1.3-billion to more than $18-billion in recent years.

At the same time, he has turned down much better pay packages than Yale's 1.3-million. The Times makes much of this, that Swensen sees himself as a man on a noble mission, doing a kind of public service. Whatever your feeling about his essential nobility, the piece is still highly worthwhile.

From a venture capital perspective, Swensen was among the first major endowment managers to really go aggressively into private equity. He has a great reputation as a talent-picker, so if you are able to get Yale to commit to your venture fund, you can pretty much assure yourself of an avalanche of diligence-free other money.

A related aside: You should also read Yale's annual endowment report when you have a moment. It's readable, insightful, and generally important yearly investment reading. The following chart compares Yale's portfolio allocation to those of its peers, and there are some very material differences:

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