@article {Mladina43, author = {Peter Mladina and Jeffery Coyle}, title = {Yale{\textquoteright}s Endowment Returns: Manager Skill or Risk Exposure? }, volume = {13}, number = {1}, pages = {43--50}, year = {2010}, doi = {10.3905/JWM.2010.13.1.043}, publisher = {Institutional Investor Journals Umbrella}, abstract = {In this article, the authors examine the underlying factors that drove the outsized performance of the Yale University Endowment over the past two decades. With the aid of the Endowment{\textquoteright}s published asset allocation targets and their own "Proxy Portfolios" designed to replicate the Endowment{\textquoteright}s exposure to common risk factors, they were able to delve fairly deeply into the drivers of the Endowment{\textquoteright}s returns. As the authors observed the Endowment{\textquoteright}s gradual transition from a conventional public markets strategy to one capitalizing on alternative investments{\textemdash}notably private equity, real assets, and hedge funds{\textemdash}it became apparent that much of the putative case for the Endowment{\textquoteright}s performance, the skill of its active managers, was not entirely correct. This article suggests that heavy exposure to common equity risk factors and manager skill in private equity drove the Endowment{\textquoteright}s sizable returns. These key findings have significant implications for investors who are seeking manager skill across asset classes.TOPICS: Foundations \& endowments, real assets/alternative investments/private equity, performance measurement, manager selection}, issn = {1534-7524}, URL = {https://jwm.pm-research.com/content/13/1/43}, eprint = {https://jwm.pm-research.com/content/13/1/43.full.pdf}, journal = {The Journal of Wealth Management} }