Keynes, King’s and Endowment Asset Management

Chapter 4 of J Brown and C Hoxby (Eds), How the Financial Crisis and Great Recession Affected Higher Education, University of Chicago Press, 2015, pages 127–150

Posted: 20 Sep 2014 Last revised: 20 Mar 2016

See all articles by David Chambers

David Chambers

University of Cambridge - Judge Business School, Department of Finance & Accounting

Elroy Dimson

University of Cambridge - Judge Business School; London Business School

Justin Foo

University of Cambridge - Judge Business School

Multiple version iconThere are 2 versions of this paper

Date Written: August 19, 2014

Abstract

Founded in 1441, King’s College was one of Cambridge University’s wealthiest Colleges, endowed with a vast agricultural portfolio. John Maynard Keynes was appointed bursar just after WWI and initiated a major reallocation to equities, an innovation at least as radical as the late 20th century commitment to illiquid assets by Harvard and Yale. Keynes initially pursued a market-timing approach to investment with mixed success and failed to anticipate the 1929 market crash. Thereafter, his switch to a patient buy-and-hold strategy allowed him to maintain his commitment to equities in the subsequent market slump, reflecting the natural advantages that accrue to long horizon investors. Keynes’ innovations in endowment asset management, implemented over a dynamic period of capital market development and economic turbulence remain of great relevance to modern investors emerging from the Great Recession.

Keywords: King’s College Cambridge, John Maynard Keynes, behavioral finance, endowment asset management; financial history

JEL Classification: B26, G11, G14, G23

Suggested Citation

Chambers, David and Dimson, Elroy and Foo, Justin, Keynes, King’s and Endowment Asset Management (August 19, 2014). Chapter 4 of J Brown and C Hoxby (Eds), How the Financial Crisis and Great Recession Affected Higher Education, University of Chicago Press, 2015, pages 127–150. Available at SSRN: https://ssrn.com/abstract=2498010

David Chambers (Contact Author)

University of Cambridge - Judge Business School, Department of Finance & Accounting ( email )

Trumpington Street
Cambridge, CB2 1AG
United Kingdom
44 (0)1223 339700 (Phone)

Elroy Dimson

University of Cambridge - Judge Business School ( email )

Trumpington Street
Cambridge, CB2 1AG
United Kingdom
+44 700 607 7390 (Fax)

London Business School ( email )

Sussex Place
Regent's Park
London, NW1 4SA
United Kingdom
44 20 7000 7000 (Phone)
44 700 607 7390 (Fax)

Justin Foo

University of Cambridge - Judge Business School ( email )

Trumpington Street
Cambridge, CB2 1AG
United Kingdom

Register to save articles to
your library

Register

Paper statistics

Abstract Views
847
PlumX Metrics