Yale Investments outlines its endowment strategy, emphasizing long-term investing, illiquid assets, and disciplined spending to balance growth with stability. The paper highlights a 5.7% return in 2019 and argues that heavy allocations to alternatives can outperform traditional portfolios, though it raises questions about liquidity risk and scalability.
2019 Endowment Update
Yale
Research
32 Pages
Key Takeaways
Strong Long-Term Returns: The endowment delivered 11.1% annual returns over 10 years, growing from $16.3B to $30.3B and outperforming institutional benchmarks.
Alternative Asset Dominance: Over 70% of assets are allocated to alternatives like venture capital and buyouts, with venture capital alone near 21% of the portfolio.
Spending Policy Discipline: Yale targets a 5.25% annual spending rate, contributing roughly $1.4B to operations while aiming to preserve purchasing power over decades.
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