From Stochastic Calculus to David Swensen’s Legacy: My Journey in Investment Management at Yale SOM

The soft glow of financial models illuminates my laptop screen as midnight turns to dawn, and I find myself smiling. These late-night adventures in quantitative finance assignments in the study rooms of Evans Hall don't feel like coursework—they feel like uncovering treasures. At Yale SOM, you don't just study investment history; you learn from the people who developed it. From the architects of the Yale Model of institutional investing to the pioneers of quantitative investing, this school is where theory meets transformation.

Let me take you inside my investment management adventure here. Imagine walking into Professor Robert Davis’s Private Equity class, where instead of just reading about PE deals, we're crafting our own take-private proposals. Every week brings a new private equity virtuoso to our classroom, sharing stories and insights that make our case studies spring to life in unimaginable ways.

The intellectual feast here? It’s absolutely magnificent. Picture yourself traveling through four centuries of financial markets with Professor James Chanos, unraveling the most fascinating frauds and insights from the 1600s to today. Meanwhile, Professor Paul Goldsmith-Pinkham has us dissecting investment strategies like master surgeons, while Professor Cameron LaPoint opens our eyes to the thrilling world of commercial real estate investing. Even more fascinating is Professor Daniel Gross’s Renewable Energy Project Finance class, where we dive deep into investment rationale and the intricate legal documentation essential for project finance.

Beyond these aforementioned MBA courses, the Asset Management program’s quantitative brilliance had me so enchanted that I couldn't resist diving in for a joint degree.

Then came the moment that changed everything. During our Investment Management class, I encountered the spellbinding tale of Yale’s endowment under former chief investment officer David Swensen. Talk about a masterclass in investment brilliance! Under his stewardship, the endowment achieved a stunning 13.1% annual return from 1985 through 2020, leaving the Cambridge Associates benchmark trailing by 3.4%. These percentages represent $45.6 billion in gains, with $36 billion in value added beyond benchmarks.

David Swensen fundamentally transformed the landscape of institutional investing. Under his leadership, Yale pioneered what would become known as the “Yale Model,” being the first to boldly venture into uncharted territories. His asset allocation strategy was revolutionary, excelling by identifying emerging opportunities in less efficient markets and alternative investments and masterfully combining top-tier external managers with strategic in-house management and co-investment approaches.

And the legacy he built? Simply extraordinary. Fifteen of his protégés are now commanding investment offices at places like Princeton, MIT, Stanford, and the Rockefeller Foundation. Even more impressive: of the 15 top-ranked endowments based on performance over the past decade, six are managed by Yale Investment Office alumni.

Participating in the Asset Management program, an incredible brainchild of David Swensen and Professor Tobias Moskowitz, feels like being handed the keys to an investment kingdom. Beyond their academic roles, our professors are active architects of market innovation. They bring firsthand insights from AQR, Blackstone, Bridgewater, and beyond. It's like having the investment world's finest as your mentors.

My academic journey spans the full spectrum of modern investing: from Professor Moskowitz’s PhD-level Quant Investing, in which we analyze Eugene Fama’s market efficiency models, to Professor Nicholas Barberis’s Behavioral Finance, which explores Professor Robert Shiller’s market inefficiency dynamics. Professor Bryan Kelly’s Financial Econometrics and Machine Learning class completes this quantitative triangle with cutting-edge technology. The curriculum extends further with electives in Hedge Fund Strategies, Portfolio Management in Practice, Financial Markets and Macroeconomic Policy, Fixed Income Strategies, and ESG Investing among others. These are complemented by weekly Asset Management Colloquia featuring prominent investment managers.

I never imagined I'd be learning everything from cutting-edge quant strategies and machine learning techniques to fundamental analysis, from alternatives investing to project finance, all from these incredible pioneers of finance. Yale SOM has completely redefined what I thought was possible.

As I finish writing, the evening calls with another round of exciting challenges, and here in the gleaming halls of Evans Hall, I’m exactly where I wished I’d be—at the intersection of investment excellence and boundless possibility.