In his 14 years as Yale’s chief investment officer, David Swensen has propelled the university’s investment portfolio into the top one per cent of institutional funds. To be sure, Yale CIO David Swensen believes most institutions and the his updated edition of Pioneering Portfolio Management provides a. Reviewing Swensen’s Pioneering Portfolio Management, David Swensen, release date:Sep 23,

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Agency Issues A second theme concerns the prevalence of agency issues that interfere with the successful pursuit of institutional goals.

Pioneering Portfolio Management Hardcover Swensen was listed third on aiCIO’sa list of the most influential institutional investors worldwide Those who absorb the wisdom in this book will likewise strengthen the institutions they serve. Swensen also appropriately defines asset classes in terms of the function they serve. This very thoughtful and thorough book lays out an approach to institutional investment — management manayement a university endowment, specifically — portfoljo is both pragmatic and grounded in rigorous finance Review quote Peter L.

Pioneering Portfolio Management

Swensen discusses the three tools of portfolio management: The appendix is all about fixed income but isn’t considered an actual chapter, which seemed very strange.

Pay for patience in the timber arena contrasts with the depletion characteristic of oil and gas investments. Jul 30, Joseph Stec rated it it was ok. Mar 17, Henry Barry rated it really liked it.

Shareholder interests, with which company management generally identifies, diverge so dramatically from the goals of bondholders that lenders to companies must expect to end up on the wrong side of nearly every conflict.

Rigorous self-assessment leads to segregation of those with active management ability from those without, increasing chances for investment success by understanding which activities to avoid and which activities to pursue.

Making decisions based on thorough analysis provides the best foundation for running a strong investment program. Moreover, beware excessive diversification, especially when hiring active managers — you will eventually find a portfolio that effectively mimics and index fund while underperforming after layering on so many fees and other transactions costs.


Given their freedom of choice, managers prefer to work for and with clients they like and admire, and they like and admire My fav quotes not a review: Few institutions and even fewer individuals exhibit the ability and commit the resources to produce risk-adjusted excess returns. To ask other readers questions about Pioneering Portfolio Managementplease sign up. A masterful work by the master himself.

The World of Endowment Management The fascinating activity of endowment management captures the energy and imagination of many talented individuals charged with stewardship of institutional assets. Yet, even in equity holdings where corporate managers share a rough coincidence of interests with outside shareholders, agency issues drive wedges between the two classes of economic actors. At the same time, fund fiduciaries hope nanagement retain power by avoiding controversy, pursuing only conventional investment ideas.

He explains fee structures, which are often unfair to the investor and what one should be on the lookout for.

Pioneering Portfolio Management : David F. Swensen :

Unfortunately, nothing is mentioned of the crisis with the exception of a brief discussion of the tightening in the credit markets in late And liquidity only exists when you need it least — consider the air pocket of liquidity in during the October crash or during the Russian debt crisis.

Pinto No preview available – Also, is it a onetime large grant of money, or is there a stream of donations that can be increased with some prodding? Thank you for signing up, fellow book lover! He also favors small groups being involved with decisions.

Far too many investors spend enormous amounts of time and energy constructing policy portfolios, only to allow allocations, once established, to drift with the whims of the market. Market participants rarely wonder whether high returns came from accepting greater than market risk, or whether low returns resulted from lower than market risk.


He also serves as a trustee and director on various investment boards and teaches at Yale. Trust is more important than flash-in-the-pan success.

To see what your friends thought of this book, please sign up. Investment and Spending Goals. Swensen is the chief investment officer of Yale University and the bestselling author of Pioneering Portfolio Management. He and Charlie argue that market players routinely overpay for liquidity — so an investor should maintain holdings in relatively illiquid securities to capture extra returns.

Pioneering Portfolio Management: An Unconventional Approach to Institutional Investment

However, Swensen acknowledges the role of active investment in inefficient markets. In other cases, when evaluating individual investment strategies, investors make commitments based on the identity of the co-investors, not on the merits of the proposed transaction.

Apr 14, Emil Petersen rated it liked it.

The harsh reality of the negative-sum game dictates that, in aggregate, active managers lose to piojeering market by the amount it costs to play in the form of management fees, trading commissions, and dealer spread.

I thought it overall was a pretty good book, but the writing style left a little to be desired. Swensen Limited preview pionewring These include absolute return investments, real assets including real estate and timberand private equity. It’s a great book! Swensen lives in New Haven, Connecticut. In other words, if price movements were rescaled down…so as to be less variable, then price would do a better job of forecasting fundamentals.