Yale Increased Private Equity Allocation in 2009
BOSTON (Reuters) - Yale University Chief Investment Officer David Swensen's losses on big bets in private equity, real estate and commodities have not deterred the noted contrarian. Yale disclosed on Thursday that it had increased significantly its allocations to those sometimes risky and illiquid asset classes at the end of its last fiscal year in June, 2009. "If diversification fails to protect a portfolio in the face of a financial panic, why bother to diversify?," Swensen's investment group wrote in the university's annual endowment report released on Thursday. "The answer lies in the diversified portfolio's lower risks and higher returns." As a result, Yale's investment committee voted at the close of its fiscal year to increase its targeted allocation in private equity to 26 percent from 21 percent and in commodities and real estate to 37 percent from 29 percent, Yale disclosed in the report.
