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Case Yale

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1.
Yes, Yale Investment Office’s asset allocations are unconventional for a university endowment.
The most distinct feature of Yale’s investments compared to other endowment funds is the investment philosophy. The core contents of its philosophy are listed below: 1. First, Swensen strongly believed in equities, whether publicly traded or private. 2. A second principle was to hold a diversified portfolio. 3. A third principle was to seek opportunities in less efficient markets. 4. Fourth, Swensen believed strongly in utilizing outside managers for all but the most routine or indexed of investments. 5. Finally, the Yale philosophy focused critically on the explicit and implicit incentives facing outside managers.

For Yale, it focus more on the financial area that is less competitive and full of potentially rewarding, such as the private equity and venture capital. It pay less attention on the stock and bonds.

6. Real Asset
Real asset is the long-term asset.
First of all, the real asset has low correlation with common stock. Real asset is very different from the marketable securities. As a result, the real asset is low correlated with the marketable securities. Also, real asset can partially protect the investment from financial crisis.
Additionally, the real asset can protect the return from the inflation. Real estate can protect the return from the home price sharply rising. The investment in oil and gas can resist the energy-related inflation.
What’s more, real asset is quite inefficient. Therefore, it will generate high return if Yale can find right managers with the right strategies and the right incentives

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