Yale University is a privileged institution. Many of its graduates go on to great power. George W. Bush was educated there, as were his predecessor Bill Clinton, his father George H.W. Bush, vice-president Dick Cheney and the man he beat in 2004, Senator John Kerry.
An Ivy League institution, it has long been one of the world’s most prestigious universities. But maybe its greatest privilege is to have David Swensen as the manager of its endowment fund.
When he took over the endowment in 1985, it was worth slightly more than $1bn. By June 30 last year it had reached $18bn. The best-performing US endowment in that time, it has easily beaten the S&P 500, with staggeringly low volatility.
During the bear market of 2001-02, Peter Bernstein reports in his recently published book Capital Ideas Evolving, Yale rose 10 per cent while the S&P dropped 30 per cent.