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Rekenthaler Report

Three Lessons From Yale's Endowment Fund

Everyday investors will not wish to copy the famed pension funds, but they can pick up some tips.

The Cheese Stands Alone
The Yale endowment fund, run since 1985 by David Swensen, leads by exception. Just as Warren Buffett became the top corporate CEO by managing differently from other CEOs, and Vanguard grew into the world's largest fund company by doing what its competitors did not, so too did Yale ascend the top of the pension-fund rankings. While other pension funds dabbled with unconventional assets, Yale gorged upon them. At last report, the Yale fund held 73% of its assets in alternative investments.

The rest of the world invests by "Core and Explore"; Yale opts for "Explore and Core."