Investments Office hires Yalies

Yale boasts the second largest endowment in higher education at $16.7 billion, but a team of just 24 people at the Investments Office handles the University’s funds.

The office, which is notorious for its secrecy, has expanded its recruitment efforts in recent years. It held its first-ever information session for applicants in 2007, and began advertising jobs on Facebook in the same year.

Seventeen members of the current staff were educated at Yale — whether in the college, at one of the professional schools or both. Eleven former Yale undergraduates have joined the crew during the past decade, often choosing a position at the Investments Office over offers from investment banks or consulting firms

The notoriously secretive Yale Investments Office handles $16.7 billion, the second largest endowment in higher education, with a team of just 24 people.
The notoriously secretive Yale Investments Office handles $16.7 billion, the second largest endowment in higher education, with a team of just 24 people.
Xinchen Wang '09, Financial Analyst
Xinchen Wang '09, Financial Analyst
Michael Schmidt '08, Financial Analyst
Michael Schmidt '08, Financial Analyst

Led by Chief Investment Officer David Swensen GRD ’80, the Investments Office is charged with allocating Yale’s endowment to investment management organizations that include bonds, stocks, hedge funds, private equity and real estate. Every year, the office hires a handful of young analysts, many of them drawn from the Yale community. Last year, the office hired only one new member, but this year, several people in the office may leave, and recruitment efforts aim to bring in more employees, senior associate Alexander Hetherington ’06 said. At the same time, the office has received fewer applications than in previous years, Hetherington said, adding that he does not know why.

“To be interested in this job, it helps a lot if you feel a real connection to Yale and want to do something good for the University,” Hetherington said.

‘A PRETTY SMALL NICHE’

The Investments Office is insular, and though the Yale graduates who work there may be familiar with the University, most of the Yale community has no idea what goes on within the confines of the office. In fact, the mystery that shrouds the office was a theme of last spring’s Yale Show, in which Swensen disappeared without warning and left the University in chaos.

Lisa Howie ’00 SOM ’08 said working for the Investments Office was not even on her radar when she first started looking for a job.

Now an associate director at the Investments Office, Howie said she first heard about the position in a seminar called “Endowment Management” she took at the Yale School of Management. The class was taught by two professors, one of them Swensen’s deputy, Dean Takahashi ’80 SOM ’83. Howie said the job struck her as the “perfect mix” of finance and non-profit work.

“I think endowment management is the perfect job, but it’s also a pretty small niche,” Howie said. “When I was in college, I didn’t even know this existed.”

Michael Schmidt ’08 joined the Investments Office right out of college, in July 2008. Schmidt called himself an “unconventional story” among the analysts. A history major, he was considering going to graduate school, working at a think tank or applying to Teach For America. But then he heard about working with Yale’s endowment.

“I’d just had an aversion to the idea of working in finance — I basically didn’t want to go work for Goldman Sachs,” Schmidt said. “But I realized finance was meaningful and something I should learn about.”

HIRING AND TURNOVER

Though some people in the office are not interested in traditional jobs in finance, others use their positions as a stepping-stone to other jobs after two to three years, Hetherington said.

The number of people the office hires varies by year, he said, usually ranging between one and three. All new employees in the past four years have come exclusively from Yale College or professional schools. The office hired three members from the Yale College class of 2009, four from the class of 2008, and only one from the 2010, 2007 and 2006 Yale classes.

Hetherington said the Investments Office is looking to accept more candidates this year.

“We have a substantial amount of people that are sort of in that window in their careers where there tends to be turnover,” Hetherington said.

The office usually receives about 75 applications, Hetherington said, of which 90 to 95 percent have gone to some Yale school. Hetherington said this year only about 50 applications have come in so far — fewer than the typical number submitted by October.

Hetherington said the office prefers hiring young employees who will work their way up to bringing new people into higher level positions. Screening applicants from the Yale community is simpler, he said, because professors, organizations and other members of the University network can help to evaluate candidates. Though many of the applicants have experience in finance, it is not a pre-requisite.

And recruiting from the Yale student body also helps ensure that the newest members of the Investments Office team will have a stake in their work, Hetherington said.

“Here you get to have a finance job and all the sort of excitement, rigor and analysis that comes with it,” he said.

Yale’s endowment lost 24.6 percent of its value in fiscal year 2009, but gained 8.9 percent in the 2010 fiscal year.

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