September 2, 2005

How Small Colleges Can Get Yale-Like Returns

By JOHN L. PULLEY

Even without an investment all-star to lead them, small endowments can improve their performance by following the same basic principles that guide Yale University's strategy, says David Swensen, the institution's chief investment officer.

Anyone with even a passing knowledge of the investment business understands, for example, that portfolios should be diversified and oriented toward equity holdings. And yet, he says, "the overwhelming majority of investors constructs portfolios that

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