Yale University Investments Office: August 2006

Targeting an Advantage through Strategic Asset Allocation and ready Management The Lessons of The Yale Endowment Executive Summary Presented by Old vernacular June 2008 Executive Summary The Yale Endowment is known in the financial exertion as a pioneer in using a combination of innovative asset allocation and prompt wariness to produce impressive long-term performance. In fact, the Endowment produced a 17.8% average annual return, net of fees, in the ten-year period determination June 30, 2007.1 This performance is particularly impressive given that, in late years, the Endowment portfolio has carried less than a 40% weighting in equities. Instead, under the leadership of Chief Investment locationr Dave Swensen, the Yale Investments king has pursued investment opportunities in nontraditional asset classes such(prenominal) as absolute return strategies, private equity partnerships and historical assets including real estate, oil and gas assets, and timberland. (See the table.) Returns from these alternative asset classes whitethorn have low correlations to those of the U.S. equity market and therefore may provide enhanced portfolio diversification. Asset Class Domestic fair-mindedness unlike Equity Fixed Income Absolute Return Private Equity Real Assets Cash June 30, 2007 11.0% 14.1 4.0 23.2 18.7 27.1 1.

9 June 30, 2007 Targets 11.0% 15.0 4.0 23.0 19.0 28.0 0.0 Diversification is not the only reason that the Yale Investments Office pursues investments in nontraditional assets. Another reason is Swensens enamor that these markets offer more opportunities for active managers to add value. The use of outside, fundamentally-oriented active fund managers has been a key factor in the spend success of the Yale Endowment, accounting for more than half of its performance good between 2001 and 2006.2 The Yale Investments Office views its relationships with outside managers as long-term partnerships, and carefully structures compensation so that manager interests are aligned with those... If you inadequacy to get a full essay, order it on our website: Orderessay

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