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David Swensen’s Lasting Impact

Source: Wikimedia Commons, Henry Farnam Hall, a freshman residence hall on the Old Campus of Yale University, February 8, 2014

Much has been written over the past week about David Swensen, the longtime Yale University Chief Investment Officer, who died at age 67 on May 5, after a long battle with cancer. The father of the “Yale Model” was a pioneer. His approach of allocating large portions to alternative assets has been widely adopted by non-profits, as well as by individuals and families with substantial assets.

A legacy of strong performers
What might be an even greater legacy is the indelible mark he has left on those that he mentored throughout his years at Yale. According to Swensen’s longtime deputy investment officer at Yale, Dean Takahashi, of the top 15 endowments ranked on their 10-year performance numbers, six are led by Yale Investments Office alumni. And, according to data from OCIO search firm, Charles Skorina & Company, that includes the top two spots. Both Paula J. Volent at Bowdoin and Seth Alexander at MIT are Swensen disciples.

Source: Charles Skorina & Company

Promoting gender diversity
Swensen and investment committee members at a number of leading endowments and foundations across the United States also seemed to realize that promoting gender diversity in the top ranks makes for strong returns. Findings from a 2020 Credit Suisse study found that companies with more female executives in decision-making positions continue to generate stronger market returns and superior profits.

In fact, half of the top 20 performers in Skorina’s latest OCIO report are women, with Wesleyan’s Anne Martin being yet another of Swensen’s former mentees. Other industries that continue to struggle to promote women to senior finance roles, including financial services, would be wise to follow the example set by these institutions, and Swensen in particular.