13 Pages Posted: 21 Dec 2014 Last revised: 20 Mar 2016
Date Written: February 1, 2015
The US endowment model is an approach to investing popularized by Yale University that emphasizes diversification and active management of equity-oriented, illiquid assets. The writings of the British economist John Maynard Keynes were a considerable influence on the investment philosophy of Yale’s chief investment officer, David Swensen. How did Keynes gain these insights? We track Keynes’s experiences managing the King’s College, Cambridge, endowment and show how some of the lessons he learned remain relevant to endowments and foundations today.
Keywords: Long horizon investing, Yale, Keynes, Investment strategy, illiquid assets
JEL Classification: B26; G20; G23
Suggested Citation: Suggested Citation
Chambers, David and Dimson, Elroy, The British Origins of the U.S. Endowment Model (February 1, 2015). Financial Analysts Journal, Vol 71, No 2, pages 8–12, 2015. Available at SSRN: https://ssrn.com/abstract=2541034