In this episode, Sinead and Alex unpack how university endowments went from sleepy ivory tower piggy banks to Wall Street-grade investment machines.
They trace the rise of the Yale model, poke fun at Columbia’s lackluster (cough) returns, and dive into the messier realities of geopolitical risk, political blowback, and the illusion of “perpetuity.”
It's a fast-moving look at how elite institutions are facing a credibility crisis, and what happens when the money behind the marble columns starts to dry up.
Takeaways
Universities have transformed into financial entities focused on profit.
The Yale model revolutionized endowment strategies, favoring illiquid assets.
Columbia University has consistently underperformed the S&P 500 since 2016.
The financial crisis has led to panic selling among universities.
Geopolitical risks are now a significant factor in university investments.
Universities claim neutrality while making politically charged investments.
The prestige of elite universities is being challenged by financial mismanagement.
Cultural differences exist in how universities approach funding and donations.
The idea that universities are immune to market forces is fading.
The future of prestigious universities is uncertain amidst financial turmoil.
Chapters
00:00 The Transformation of University Endowments
02:41 The Yale Model and Its Impact
04:29 Columbia's Struggles and the Illiquidity Crisis
06:35 The Reckoning of University Investments
09:21 Political Pressures and Financial Vulnerabilities
14:11 Geopolitical Risks and Financial Strategies
16:50 The Future of University Endowments
