In his 14 years as Yale’s chief investment officer, David Swensen has propelled the university’s investment portfolio into the top one per cent of institutional funds. To be sure, Yale CIO David Swensen believes most institutions and the his updated edition of Pioneering Portfolio Management provides a. Reviewing Swensen’s Pioneering Portfolio Management, David Swensen, release date:Sep 23,

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Pioneering Portfolio Management : David F. Swensen :

This book lays out fundamentals of portfolio management from the perspective of one of the most successful and credible practitioners in the market: We therefore need someone genetically programmed to recognize and avoid serious risks, including those never before encountered. The writing style was challenging at times, and definitely quite literally put me to sleep on more than one occasion, but it is a fairly thorough explanation of the perspectives of one of the best portfolio managers out there.

Only with the confidence created by a strong decision-making process can investors sell mania-induced excess and buy despair-driven value. Finally, think long-term and adopt contrarian thinking.

I was expecting a little more advanced portfolio theory. While Yale and other large school endowments use these, they like alternative asset classes more than many other investors.

Pioneering Portfolio Management: An Unconventional Approach to Institutional Investment

Apr 14, Emil Petersen rated it liked it. He also serves as a trustee and director on various investment boards and teaches at Yale. Malkiel, Chemical Bank Chairman’s Professor of Economics, Princeton University One of the world’s most successful institutional fund managers presents powerful insights to help us become better investors.

Other significant issues include fidelity to investment principles and maintenance of an appropriate organizational structure. By beginning with an analysis of the broad questions regarding the asset allocation framework and narrowing the discussion to issues involved with managing specific investment portfolios, the book lays out a neat progression from macro to micro, ignoring the complex simultaneity of the asset management process. In other words, if price movements were rescaled down…so as to be less variable, then price would do a better job of forecasting fundamentals.


A discussion of portfolio management issues examines situations where real world frictions might impede realization of portfolio objectives. The costly game of active management guarantees failure for the casual participant.

Swensen lives in New Haven, Connecticut. He begins by exploring the reasons for endowments and the necessity of an appropriate polices for spending and investments.

Swensen’s exceptionally readable book addresses critical concepts such as handling risk, selecting investment advisers, and negotiating the opportunities and pitfalls in individual asset classes. Trust is more important than flash-in-the-pan success. He and Charlie argue that market players routinely overpay for liquidity — so an investor should maintain holdings in relatively illiquid securities to capture extra returns.

Dwensen asset classes contain investment vehicles exhibiting some degree of agency risk, with corporate bonds representing an extreme case. Swensen employs an array of vivid real-world examples, many drawn from his own formidable experience, to address critical concepts such as handling risk, selecting advisors, and weathering market pitfalls.

In the years since the now-classic Pioneering Portfolio Management was first published, the global investment landscape has changed dramatically — but the results of David Swensen’s investment strategy for the Yale University endowment have remained as impressive as sewnsen.

David Swensen is a leader and pioneer whose words reveal a rare combination of courage, integrity, and intelligence.

Sep 05, Bowen Zhong rated it really liked it. Swensen advises appropriately to maintain an equity bias and follow diversification principles. Now, this pioenering leader of fund managers draws on his experience and deep knowledge of the financial markets to provide a compendium of powerful investment piioneering.

The alternative of trying to pursue active strategies on-the-cheap exposes assets to material danger. Promising investments come to light only after culling dozens of mediocre alternatives.


Review quote Peter L. Swensen offers clear and incisive advice, especially when describing a counterintuitive path. Conventional investing too often leads to buying high and selling low.

The process of rebalancing requires a fair degree of activity, buying and selling to bring underweight and overweight allocations to target. Second half gets very wonkish and he kind of starts speaking out of both sides of the mouth. Such institutions have a longer time horizons, the available resources for managing such investments and large amounts which allows them to expand into new categories which include more illiquid investments.

The harsh reality of the negative-sum game dictates that, in aggregate, active managers lose to the market by the amount it costs to play in the form of management fees, trading commissions, and dealer spread.

Realizing an average annual return of Add to Cart Add to Cart.

Reviewing Swensen’s Pioneering Portfolio Management –

I just thought it was a little elementary. Any student of markets will benefit from Pioneering Portfolio Management.

This book will be a classic: For example, asset allocation relies on a combination of top-down assessment of asset class characteristics and bottom-up evaluation of asset class opportunities. This book came out in February Is it intended to last forever, or is it intended on having a set lifetime?

Pioneering Portfolio Management

Overall very solid book. In this fully revised and updated edition, Swensen, author of the bestselling personal finance guide Unconventional Success, describes the investment process that underpins Yale’s endowment.

As he did in Unconventional Success, pionfering recommends staying away from corporate bonds.