The late David Swensen.
Why does Yale have a $31 billion endowment?
More than anyone, David Swensen gets the credit.
Swensen headed the Yale investment office since 1985. He died Wednesday evening at 67 years old after a long bout with cancer.
Yale’s endowment stood at $1 billion when Swensen took over. Over three and a half decades, Swensen pioneered a distinctive and diversified investment strategy (including scouring the world from a private plane to assess potential risks and opportunities) that at times saw Yale’s endowment soar past those of its peers. Other universities copied the Swensen “Yale model,” sometimes hiring mentees trained by Swensen to lead their efforts. And Yale’s endowment kept growing, surpassing the $31 billion mark in 2020.
Swensen believed deeply in the value of academia. He left a Wall Street career that would have earned him infinitely more money to use his skills for a greater purpose than purely making money for money’s sake.
“It’s largely thanks to Swensen that the university can woo star scholars, that its admissions can be need-blind, its libraries and cafeterias staffed, its sports teams fielded, its grad students stipended, its antique windows tended, and its lawns aerated,” BusinessWeek wrote in an article entitled, “How David Swensen Made Yale Fabulously Rich.”
He was also a cheerful and open presence in New Haven. He beat odds not just in the market but in his personal life: he recovered from earlier bouts with his disease to return to his job for years longer than had been predicted, and used that time to keep supporting the pursuit of knowledge.
Following is a tribute distributed Thursday morning by Yale President Peter Salovey:
I write with profound sadness to share the news that David Swensen, Yale’s chief investment officer, died yesterday evening after a long and courageous battle with cancer. David served our university with distinction. He was an exceptional colleague, a dear friend, and a beloved mentor to many in our community. Future generations will benefit from his dedication, brilliance, and generosity.
After receiving his Ph.D. in economics from Yale in 1980, David worked for Salomon Brothers and Lehman Brothers before returning to Yale in 1985 to lead our investments office. With his guidance, Yale’s endowment yielded returns that established him as a legend among institutional investors. Over the years, he lectured in Yale College and the School of Management. On Monday, he and long-time friend and colleague Dean Takahashi taught the last class of the term for Investment Analysis, a seminar they co-instructed for thirty-five years. David was an incorporator of the Elizabethan Club and a fellow of Berkeley College. In fact, he was a first-year counselor in Berkeley when he was studying for his doctorate at Yale, and he maintained connections with the people he counseled all those decades ago.
David’s ideas reverberated beyond Yale as he revolutionized the landscape of institutional investing. His approach, which has become known as the “Yale Model,” is now the standard for many university and foundation endowments. A natural teacher, he prepared a generation of institutional investors who have gone on to lead investment offices at other colleges and universities, further extending the scope of David’s influence. As the author of two books (Pioneering Portfolio Management: An Unconventional Approach to Institutional Investment and Unconventional Success: A Fundamental Approach to Personal Investment), he shared his insights and experiences with a wide readership.
David believed deeply in Yale’s mission of education and research, and he dedicated his professional life to stewarding and growing the university’s endowment so it could support Yale’s vital work in the world. In 2007, he was awarded the Mory’s Cup for conspicuous service to Yale, and in 2012, he received the Yale Medal for outstanding individual service to the university. In 2014, he was presented with an honorary doctor of humane letters at Yale’s commencement. The Swensen Initiative, established by my predecessor Rick Levin, recognizes David’s contributions to Yale. The effort has raised over $35 million to support activities, projects, and people that were especially meaningful to David, including financial aid, faculty, and athletics.
David was a kind, generous, and intensely principled friend, and some of my most enduring memories of him center around his wholehearted devotion to Yale athletics. A loyal, passionate fan, David loved to cheer on the Bulldogs at the Bowl or from the sidelines of a tennis match, and he combined his passion for sports with philanthropy. An avid tennis player, he hosted the annual “Swensen Tennis Extravaganza,” each year at the Connecticut Open with Rick Levin and then with me. The event, which included golf as well, raised millions of dollars for Yale’s community-based partnerships. Although he made his home in Connecticut for many years, David remained true to his Wisconsin roots and his beloved Green Bay Packers.
Beyond Yale, David was a thoughtful, trusted advisor to many. He was a fellow of the American Academy of Arts and Sciences and a member of the Council on Foreign Relations, and he advised President Barack Obama as a member of the President’s Economic Recovery Advisory Board. Over the years he served as trustee or advisor to the Brookings Institution, Cambridge University, the Carnegie Corporation, the Carnegie Institution of Washington, the Chan Zuckerberg Initiative, the Hopkins School, TIAA, the New York Stock Exchange, the Howard Hughes Medical Institute, the Courtauld Institute of Art, the Yale New Haven Hospital, the Investment Fund for Foundations, the Edna McConnell Clark Foundation, and the States of Connecticut and Massachusetts.
David will be remembered at Yale and beyond our campus. Please join me in expressing our collective appreciation for his lifelong commitment to Yale and in extending our most heartfelt condolences to his wife, Meghan McMahon, and their family.