The British origins of the U.S. endowment model

Dimson, E and Chambers, D J (2015) The British origins of the U.S. endowment model. Financial Analysts Journal, 71 (2). pp. 10-14. ISSN 0015-198X

Abstract

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.