(GuruFocus, October 10, 2009) FT’s US managing editor Chrystia Freeland had a lunch with Investment Guru David Swensen and published a write-up in FT.com. It provides a glimpse of what occupies the mind of Swensen these days.
Individual investors will have a hard time to mimic how Swensen manages his money, for much of the Yale Endowment is placed in illiquid asset such as private equity and real estate. The return has been good, since he took helm of the endowment. For the past ten years, Yale’s endowment fund posted average annual gains of 16.3 per cent, including banner returns of 41 per cent in 2000 and 28 per cent in 2007, according to the Freeland article. But for the fiscal year ended on June 30, 2009, the fund was down 24.6%.
In the Freeland interview, Swensen defended his record and portfolio management strategy:
I also like these two statements Swensen made during the lunch:
It is a good interview, read the article .
Much of David Swensen’s Yale money is in private equity and real esate. For our part, GuruFocus does track a small stock portfolio that he manages, $60 million in 10 stocks . Here are the top holdings on June 30, 2009, the last time he reported on
No. 1: Douglas Emmett Inc. (DEI, Financial), Weighting: 47.06% - 3,185,349 Shares
DOUGLAS EMMETT INC is a real estate investment trust. It is one of the largest owners and operators of high-quality office and multifamily properties located in California and Hawaii. Douglas Emmett Inc. has a market cap of $1.57 billion; its shares were traded at around $12.89 with a P/E ratio of 9.6 and P/S ratio of 2.6. The dividend yield of Douglas Emmett Inc. stocks is 3.1%.
Swensen held 11.8 million shares since 4Q06 but reduced to 3.2 million shares in 3Q08. He held his shares steady during the last month.
No. 2: Acadia Realty Trust (AKR, Financial), Weighting: 37.68% - 1,756,745 Shares
Acadia Realty Trust is an REIT focused primarily on the ownership, acquisition, redevelopment, and management of neighborhood and community shopping centers. Acadia Realty Trust has a market cap of $588.8 million; its shares were traded at around $14.84 with a P/E ratio of 12.5 and P/S ratio of 4.2. The dividend yield of Acadia Realty Trust stocks is 4.8%. Acadia Realty Trust had an annual average earning growth of 9.3% over the past 5 years.
Swensen help 2.2 million shares sicne 3Q06 and reduced to 1.8 million shares in 3Q08. He also held his shares in AKR in 2Q09.
No. 3: Infinera Corp. (INFN, Financial), Weighting: 2.58% - 171,883 Shares
Infinera provides Digital Optical Networking systems to telecommunications carriers, cable operators and other service providers worldwide. Infinera Corp. has a market cap of $784.9 million; its shares were traded at around $8.2 with and P/S ratio of 1.4.
Swensen held 100K shares in 3Q07 and increased to 172K shares in 2Q09.
No. 4: TiVo Inc. (TIVO, Financial), Weighting: 1.25% - 72,724 Shares
TiVo pioneered a brand new category of products with the development of the first commercially available digital video recorder. Tivo Inc. has a market cap of $1.15 billion; its shares were traded at around $10.6 with and P/S ratio of 4.7.
Swensen bout his 72,724 share in TIVO in 2Q09.
Comments
Swensen is also seen holding shares in ETFs such as iShares MSCI EAFE Index Fund (5.57%) and iShares S&P 100 Index Fund (3.68%) .
Much of the investments that he manages for Yale are in PE and real estate. In the small stock portfolio, we see two REITs and two electronics companies.
GuruFocus provides real time information and insights of Investment Gurus such as Warren Buffett and David Swensen for Premium Members. If you are not a premium member, click here to sign up or upgrade. 7-Day Free Trial is available.
Individual investors will have a hard time to mimic how Swensen manages his money, for much of the Yale Endowment is placed in illiquid asset such as private equity and real estate. The return has been good, since he took helm of the endowment. For the past ten years, Yale’s endowment fund posted average annual gains of 16.3 per cent, including banner returns of 41 per cent in 2000 and 28 per cent in 2007, according to the Freeland article. But for the fiscal year ended on June 30, 2009, the fund was down 24.6%.
In the Freeland interview, Swensen defended his record and portfolio management strategy:
“There have been some articles that have criticised the Yale model and my role in managing the endowment. And I think that’s odd ... What’s the alternative? Aside from the heroic impossible alternative of being 100 per cent in T-bills?” Over the longer run, he says, Yale’s diversified strategy handily beats a classic 70/30 allocation in stocks and bonds.
The larger point, Swensen believes, is that even though moments of radical disruption, such as the 2007 financial crisis, reward investors who make a big bet on major change, “ultimately, market timing is an exercise in futility. When you’ve got dramatic movements in the markets you can identify after the fact a handful of investors that succeeded in the short run. But making big, aggressive asset allocation moves isn’t a strategy that’s likely to prove successful in the long run.”
I also like these two statements Swensen made during the lunch:
“you should invest only in things that you understand. That should be the starting point and the finishing point.” "The overwhelming number of investors, individual and institutional, should be completely in low-cost index funds because that’s easy to understand."
It is a good interview, read the article .
Much of David Swensen’s Yale money is in private equity and real esate. For our part, GuruFocus does track a small stock portfolio that he manages, $60 million in 10 stocks . Here are the top holdings on June 30, 2009, the last time he reported on
No. 1: Douglas Emmett Inc. (DEI, Financial), Weighting: 47.06% - 3,185,349 Shares
DOUGLAS EMMETT INC is a real estate investment trust. It is one of the largest owners and operators of high-quality office and multifamily properties located in California and Hawaii. Douglas Emmett Inc. has a market cap of $1.57 billion; its shares were traded at around $12.89 with a P/E ratio of 9.6 and P/S ratio of 2.6. The dividend yield of Douglas Emmett Inc. stocks is 3.1%.
Swensen held 11.8 million shares since 4Q06 but reduced to 3.2 million shares in 3Q08. He held his shares steady during the last month.
No. 2: Acadia Realty Trust (AKR, Financial), Weighting: 37.68% - 1,756,745 Shares
Acadia Realty Trust is an REIT focused primarily on the ownership, acquisition, redevelopment, and management of neighborhood and community shopping centers. Acadia Realty Trust has a market cap of $588.8 million; its shares were traded at around $14.84 with a P/E ratio of 12.5 and P/S ratio of 4.2. The dividend yield of Acadia Realty Trust stocks is 4.8%. Acadia Realty Trust had an annual average earning growth of 9.3% over the past 5 years.
Swensen help 2.2 million shares sicne 3Q06 and reduced to 1.8 million shares in 3Q08. He also held his shares in AKR in 2Q09.
No. 3: Infinera Corp. (INFN, Financial), Weighting: 2.58% - 171,883 Shares
Infinera provides Digital Optical Networking systems to telecommunications carriers, cable operators and other service providers worldwide. Infinera Corp. has a market cap of $784.9 million; its shares were traded at around $8.2 with and P/S ratio of 1.4.
Swensen held 100K shares in 3Q07 and increased to 172K shares in 2Q09.
No. 4: TiVo Inc. (TIVO, Financial), Weighting: 1.25% - 72,724 Shares
TiVo pioneered a brand new category of products with the development of the first commercially available digital video recorder. Tivo Inc. has a market cap of $1.15 billion; its shares were traded at around $10.6 with and P/S ratio of 4.7.
Swensen bout his 72,724 share in TIVO in 2Q09.
Comments
Swensen is also seen holding shares in ETFs such as iShares MSCI EAFE Index Fund (5.57%) and iShares S&P 100 Index Fund (3.68%) .
Much of the investments that he manages for Yale are in PE and real estate. In the small stock portfolio, we see two REITs and two electronics companies.
GuruFocus provides real time information and insights of Investment Gurus such as Warren Buffett and David Swensen for Premium Members. If you are not a premium member, click here to sign up or upgrade. 7-Day Free Trial is available.
