David Swensen, who pioneered an investing style that helped endowments beat markets by using alternative assets such as private equity and real estate, said investors who don’t have access to top managers are best off using index products.
Harvard University, Yale University and Stanford University, with combined endowments about equal to the gross domestic product of Lithuania, are among 15 of the wealthiest colleges and universities that borrowed $7.2 billion because their highbrow investing left them suddenly strapped for cash.
Yale University, the second- wealthiest college, may increase its holdings of hedge funds after cutting them last year and shifting into cash, according to a report from the investments office run by David Swensen.
Harvard University, which last week introduced the largest capital campaign in the history of higher education, gained 11.3 percent on its investments in the year through June as the size of the endowment grew to $32.7 billion.
Yale University, whose endowment strategy is a model for U.S. schools, said its investments rose 8.9 percent, trailing Harvard University and the three other Ivy League funds that have reported returns for the past year.