Yale University Investment Model Essay

13530 Words Dec 5th, 2011 55 Pages
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REV: MAY 8, 2007

JOSH LERNER

Yale University Investments Office: August 2006
David Swensen slowly crossed the trading floor of the Yale Investments Office and looked over the hectic scene. While Swensen himself could not move quickly—he had been on crutches since an injury in the Yale Summer League championship softball game against the Biological and Biomedical Sciences team earlier in the month—the remainder of the staff was moving rapidly, whether leafing through online data or consulting with their peers about prospective investments. Swensen had every reason to feel content, despite his recent injury. The endowment had just completed another spectacular year, having grown to $18 billion (up from $1 billion when he
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Students and alumni alike demanded that the school respond by establishing a divinity school to offer theological instruction. To fund this effort, numerous alumni made large gifts, the first in a series of successful fund drives. While Yale used many of these donations to buy land and construct buildings, other funds were invested in corporate and railroad bonds, as well as equities. By the century’s end, the endowment had reached $5 million.

1 This section is based on Brooks Mather Kelley, Yale: A History (New Haven: Yale University Press, 1974); David F. Swensen,

Pioneering Portfolio Management: An Unconventional Approach to Investment Management (New York: Free Press, 2000); and Yale University Investments Office, The Yale Endowment (New Haven: Yale University, 2006). ____________________________________________________________

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Professor Josh Lerner prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2007 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-545-7685, write Harvard Business School Publishing, Boston, MA 02163, or go to

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