Yale investment guru David Swensen was named one of the ten worst university endowment managers in the nation by Business Insider for the second consecutive year. Among ten higher education funds to return less than 4 percent in fiscal year 2010, Yale ranked No. 4 with a mere 2 percent increase. The average return seen by colleges and universities nationwide in the latest fiscal year was 11.9 percent, according to a study released by the NACUBO-Commonfund Institute last week.
Swensen has earned acclaim from the investment community for pioneering a strategy known as the “Swensen model” or “Yale model.” His diversified approach relies largely on illiquid assets such as private equity, venture capital, oil, gas and timber instead of United States stocks and bonds. In the years leading up to the financial crisis of 2008-’09, the Swensen model led Yale to significant endowment gains of nearly 20 percent or more.