It has been 21 years since the late David Swensen published Pioneering Portfolio Management in 2000. Swensen, Chief Investment Officer at Yale, is widely credited with establishing the “endowment model” of investing with his book on Yale’s investing approach.
The world and markets over the past 21 years have seen remarkable developments: the bursting dot-com bubble; the tragedy of September 11; 3G, 4G and 5G mobile technology; a global financial crisis; the rise of China; the development of scalable, affordable renewable energy; five US presidents; the first global pandemic of the modern era and a new set of technology-led equity market leaders.
Twenty-one years is a long time. What has happened in markets over the past 21 years? How have endowments performed? How should we think about the next 20 years?
Mercer has advised mission-driven not-for-profit organizations for more than 45 years. Over its own history, the Pavilion practice team within Mercer has been part of the adoption and evolution of the endowment model.
Given broader secular trends and the widespread adoption of the endowment model over the past decades, we believe prioritizing more meaningful returns will lead to greater success for mission-driven organizations in the next 20 years.
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