Yale Signals That Private Equity May Have Peaked
The university is considering selling a big chunk of its illiquid holdings.
As chief investment officer of Yale University for more than three decades, David Swensen redefined institutional investing. “Because market players routinely overpay for liquidity,” he wrote in his seminal book, Pioneering Portfolio Management, “serious investors benefit by avoiding overpriced liquid securities, and by embracing less liquid alternatives.” His conviction shaped Yale's strategy: By the time of his death in 2021, half the endowment was invested in illiquid investments, with private equity the largest component.
Four years on, Yale is reportedly preparing to sell up to $6 billion in private equity holdings. (“The university is exploring a sale of private equity fund interests,” a university spokesperson told the Yale Daily News.) That represents almost 15% of the fund’s $41.4 billion of assets, and around 30% of its private equity investments, based on data in Private Equity International’s 2024 rankings.