Yale Model

“I would suggest that what we might be seeing is the exact result of everyone copying the Yale model. You know, Howard Marks famously said, you make a lot of money when you do something non-consensus and accurate. But what if everyone copies David Swenson? What…”

“If you want to diversify your equity exposure away from the US equity market, by definition, everything else you do in the world is less liquid. You have to embrace some level of illiquidity in order to get the diversification. In the book, he described illiqu…”

“Embracing illiquidity is not a first principle of the Yale model, despite many misinterpreting David's beliefs as such.”

“Internalizing and implementing his approach, however, is as difficult as outperforming the markets.”

“Something we definitely copied of the Yale model was that you don't give money to the big retail, publicly listed asset managers that are in the business of turning out 40 new funds every year. You went with the concentrated specialist, entrepreneurial, owner-…”

“Part of me thinks the technologized model is going to empower them to be even better at the Yale model. Why? Because you're just going to have much more confidence in how your GPs draw and return capital.”

“The problem with it today, as we discussed, is that most of the investments are equity allocations, and so you're basically getting a levered S&P position.”

“Well, first of all, I think that the Yale model, quote unquote, is not a recipe that can be transferred. It's different for every organization, so it's more the key tenets of thinking about long-term investing rather than a recipe.”