David Swensen, Yale's Chief Investment Officer, Dies At 67

David Swensen, Yale University’s chief investment officer and one of the nation’s most influential higher education endowment fund managers, passed away at the age of 67 after a bout with cancer.

The Road To Yale: Swensen was born in River Falls, Wisconsin, where his father, Richard Swensen, was a chemistry professor and dean at the University of Wisconsin-River Falls. Swensen received a Bachelor of Arts and a Bachelor of Science from the university in 1975 and received a Ph.D. in economics from Yale in 1980.

Swensen worked on Wall Street at Salomon Brothers and Lehman Brothers before returning to Yale in 1985 as the Yale endowment manager, even though the position came with an 80% decrease from his Wall Street salary.

Endowment Power: The Yale endowment was $1 billion when he joined the university and is now at $31.2 billion, making it the world’s third-wealthiest university, with averaged annual returns of 12.4% a year over the past three decades.

Swensen achieved this growth by diversifying the university’s traditional investing focus on domestic stocks and bonds into a wider strategy that encompassed real estate, hedge funds and private equity.

“David’s ideas reverberated beyond Yale as he revolutionized the landscape of institutional investing,” said Yale President Peter Salovey. “His approach, which has become known as the ‘Yale Model,’ is now the standard for many university and foundation endowments.

“A natural teacher, he prepared a generation of institutional investors who have gone on to lead investment offices at other colleges and universities, further extending the scope of David’s influence,” Salovey added.

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Spreading Ideas: Swensen shared his theories on endowment management in two well-received books, “Pioneering Portfolio Management: An Unconventional Approach to Institutional Investment” and “Unconventional Success: A Fundamental Approach to Personal Investment.”

"In addition to his transformational impact, David was generous in sharing insights and guidance," said Mohamed El-Erian, chief economic adviser at Allianz ALIZY and former director of Harvard University's endowment, in a post on Twitter Inc TWTR.

Outside of the university, Swensen served as a fellow of the American Academy of Arts and Sciences and was a member of the Council on Foreign Relations. He also served a two-year term on the President’s Economic Recovery Advisory Board during the Obama administration and was a trustee and advisor to multiple organizations, including the Brookings Institution, Cambridge University, Carnegie Corporation, New York Stock Exchange and Yale New Haven Hospital.

(Photo courtesy Yale University.)