November 1st, 2011 | University

New York City to use Yale as financial model

David Swensen.
David Swensen. Photo by Gavan Gideon.

Apparently David Swensen’s influence has spread beyond the world of higher education right into the public sector.

According to a New York Times article published Thursday, New York Mayor Michael Bloomberg wants to use Yale’s and Harvard’s investment policies as models in reforming the city’s public pensions plans. His desire to do so comes as no surprise, Steven Greenhouse writes. Over the past decade, while Yale has experienced an average annual return on investments of 10.1 percent and Harvard has stayed close behind at 9.4 percent, the city’s pension plans have averaged 2.7 percent.

Reforms proposed by Bloomberg and New York City comptroller John C. Liu include consolidating the boards of the five current pensions plans into one and depoliticizing the role of the city’s chief investment officer. Bloomberg suggested such changes could possibly increase investment returns.

In the 2010 fiscal year that saw impressive endowment performances across the Ivy League, Yale registered a 21.9 percent return on its investments.