The Ledger
Every statement that passed quotation and attribution checks. Mix any filter with any other: certainty 1/5, debate potential 5/5, or both at once.
why aren't all 27 resolved? a statement only gets an assessment when the public record can support or contradict it. opinions and what-ifs never can, and 0 checkable ones are still open, waiting for their date. predictions held up or didn't; assertions are supported or contradicted. on every card: ▮▮▮▮▮ certainty · ▮▮▮▮▮ debate potential. speakers are clickable
Seides Predicts 14 of 15 Yale Prospect Fellows Will Not Graduate
“The TRS data implies that one of Yale's lucky fellows will graduate to its core portfolio every three cohorts. In other words, 14 of 15 won't make it.”
Sullivan: Five-deal track records suffer from small sample sizes and survivorship bias
“Part of what went wrong is just that if people have five or six deals in their track record, that's really not a representative set. Maybe they did just flip heads Five times in a row and look good. And one of the problems is you never see the people who flipp…”
Sullivan: Bottom-up manager selection outperformed top-down mandates at Yale
“Keeping an eye out for interesting, creative people who maybe are trying to blaze a new trail and seeing how it goes, that was a much more successful strategy for us than a sort of top-down decision to, now we need to be spending time on this.”
Sullivan: Chasing legacy 40% underwriting targets leads PE managers to failure
“We had a firm in particular that said explicitly to us, we're still looking for deals we can underwrite to 40%, and the deals that they wound up underwriting turned out to be pretty risky situations, and a fair number of those risks wound up blowing up in thei…”
Boutique Managers Historically Struggled to Survive When Yale Withdrew Capital
“When Yale pulled its capital from existing managers historically, many struggled to survive, and particularly those with the boutique single product firm that Yale favors.”
$50M Commitment Is Subscale for New PE, Real Estate, and Hedge Funds
“Even if Yale wants to continue the relationship, the fifty million dollar commitment is subscale for most strategies. An early stage venture capital or small cap public equity manager may be ready to roll with fifty million dollars, but managers of real estate…”
Forman: Rapid endowment growth prevented Yale from reaching private asset targets
“So it probably would have been fully built out sooner had the endowment not grown as much, but it was growing so fast that we were always trying to project where we needed to be and we would never get there. And that was true in all private asset classes.”
A fund manager going public marks the end of Yale's investment relationship
“Once one of our partners goes public, it's the beginning of the exit of the relationship.
It may not happen overnight.
We're usually a very large shareholder of the entity.
Sometimes we're on the board.
So exiting is slow, but there's no more opportunity to in…”
Yale's biggest mistake was giving too much leeway to manager strategy drift
“I think the biggest mistake I made at Yale over the years was managers that had some strategy drift in their portfolio, and because they had done very well in a different strategy, we gave them a little bit of too much of the benefit of the doubt, and I wish w…”
Forman: Yale Moved Away From Real Estate Firms Adopting Multiple Strategies
“We didn't invest with a lot of groups that had these really broad platforms. There were some hedge funds that did stuff. There were definitely some real estate firms that tried to do multiple strategies. We tended to move away from them over time as they tried…”
LPs have a limited window to become a new manager's primary advisor
“When we back at an early stage manager, there's a window where you need to be the person that they call when they have an issue. And that window doesn't stay open forever. And you need to take advantage of that window so that when they're 20 years later, you'r…”
Forman: Yale real estate program invested exclusively in equity
“So essentially, Yale has always just been an equity investor. Unless it's an opportunistic thing within an equity structure, we tended to only invest in the equity, and we only wanted the inflation protection.”
Forman: Yale structured real estate partnerships around GP co-invest and overhead-only fees
“Well, we're very focused on alignment of interests. So whether it's having a meaningful co-invest, whether it's fees that cover overhead, and hopefully are in a huge profit center, there's one pool of assets. So we're all in it together for better or for worse…”
Yale Endowment passed on real estate sectors without the right partner
“Historically, we took a pass on the sector. If we couldn't find the right group, we just did not pursue the sector. And industrial was a good example where even once the sector became much more interesting and institutional, it took us a while to find the righ…”
Yale's real estate portfolio allocated 80% to 90% to sector specialists
“I'd say the portfolio was probably 80 to 90% specialists, and we just thought being really good at one thing was the way to go, and a lot of the companies were vertically integrated, and they had an ability to add value and do it all themselves.”
Forman: Yale completely avoided emerging market real estate investments
“One of the smartest things we didn't do is we didn't do any emerging market real estate, and we actually didn't spend any time even looking at it.”
Swensen Backed Farallon, Bracebridge, and Lone Pine Close to Day One
“David invested with hedge fund managers Tom Steyer at Farallon, Nancy Zimmerman at Bracebridge, and Steve Mandel at Lone Pine on or close to day one.”
Swensen Backed Hillhouse, Overlook, and Silchester When They Managed Almost Nothing
“He backed international equity managers Hill House, Overlook, and Silchester when they managed next to nothing, and he was perhaps the first institutional investor in a list of venture capital and private equity firms that constitute today's most well-known br…”
Forman: Committing investment ideas to writing exposes flaws and quality
“And when you put something in writing, it exposed the flaws or how good it was. You were forced to do that, even though you probably weren't learning a lot from the writing process, just the act of putting it on paper was really important.”
Forman: Yale's committee usually approved David Swensen's investment recommendations
“What David recommended to the committee more often than not was approved. So, I mean, David was the big hurdle. That we had to get over internally.”
Forman: Yale was slow to enter student housing and self-storage
“I'd say we were a little slow on some of these nichier sectors where these non-traditional real estate sectors like student housing and self-storage Part of that was the people in the business by definition almost didn't have a lot of experience, and there was…”
Yale underwrote zero terminal value on distressed 1990s California real estate deals
“Things were so bad in California back then that we underwrote no residual
To the assets in at least one deal.
It was not even a land residual.
We assume that these assets just went away at the end of the lease term because things were so bad.”
Forman returned every phone call because top early talent lacked marketing polish
“The one thing I always did, I took every call. My pride at the end of the day was I returned every phone call, usually before I went home that night. I always felt I really like this business, so I like talking to a lot of people, but I just felt like you neve…”
Endowment Management Offers Infinite Time Horizons and Structural Flexibility
“He said, you know, it's the most amazing job. It's like the closest you'll ever come to managing your own multi-billion dollar fortune. You have incredible flexibility low liquidity needs, Long, if not infinite time horizon, few tax headaches, a single client,…”
Golden: Swensen helped secure a Princeton offer triple my Yale pay
“Dave Swenson, I asked for his help, and he got me an offer to come to Princeton for triple my compensation. I got my own offer to go to Duke, my alma mater, undergrad, for double, so I took the Duke job”