David Swensen Insight

Archive for September 2009

Pimco mimicking Yale

Pimco mimicking Yale

Here is the second paragraph of the Bloomberg report:

“The richest colleges beat market indexes in the decade through June 2008 by loading up on hard-to-sell assets such as private equity and real estate, while cutting stocks and bonds, a style pioneered by Yale University’s David Swensen. Pimco is refining the model to appeal to investors who want more flexibility to sell assets quickly to raise cash.”

Students of David Swensen understand that the Master avoids liquid assets because “market players routinely overpay for liquidity.” Serious investors benefit by avoiding overpriced liquid securities. Instead, they locate bargains in less liquid markets. This wisdom is borne out by his track record over the last two decades.

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