Pioneering Portfolio Management: An Unconventional Approach to Institutional Investment, Fully Revised and Updated

by David F. Swensen

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 ever. Year after year, Yale's portfolio has trumped the marketplace by a wide margin, and, with over $20 billion added to the endowment under his twenty-three-year tenure, Swensen has contributed more to Yale's finances than anyone ever has to any university in the country. What may have seemed like one among many success stories in the era before the Internet bubble burst emerges now as a completely unprecedented institutional investment achievement. 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. He provides lucid and penetrating insight into the world of institutional funds management, illuminating topics ranging from asset-allocation structures to active fund management. 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. Swensen offers clear and incisive advice, especially when describing a counterintuitive path. Conventional investing too often leads to buying high and selling low. Trust is more important than flash-in-the-pan success. Expertise, fortitude, and the long view produce positive results where gimmicks and trend following do not. The original Pioneering Portfolio Management outlined a commonsense template for structuring a well-diversified equity-oriented portfolio. This new edition provides fund managers and students of the market an up-to-date guide for actively managed investment portfolios.

Genres: Finance, Nonfiction

432 pages, Hardcover

Published January 6, 2009

About the author

David F. Swensen (born 1954) has been the Chief Investment Officer at Yale University since 1985. He is responsible for managing and investing the University's endowment assets and investment funds, which total $23.9 billion. Realizing an average annual return of 11.8 percent on his investments over the ten years to 2009, Swensen's consistent track record has attracted the notice of Wall Street portfolio managers. He is notable for inventing The Yale Model which is an application of modern portfolio theory. Swensen was listed third on aiCIO's 2012, a list of the 100 most influential institutional investors worldwide

Reviews

[Hairold Gelderkorn · Rating 4 out of 5]

The definitive Bible of my industry but heavens was this book boring as fuck!! There are some nice case studies sprinkled in there and the occasional insightful analysis, but aside from these, much of this book reads like a prosaic encyclopedia of asset classes. And just when you think you’re through the thick of this asset class catalogue, he hits you in the Appendix with his scathing ‘Impure Fixed Income!’

A big question mark for me is: who was this book written for? On one hand, he footnotes an explainer of what the yield curve is, then on the other hand, he delves into 6 pages of details on soft dollars. On the latter point though, my favorite theme underlying this entire book is understanding where the interests of various parties lay - very important in an industry full of snakes!

All this said though, Swensen was a legend and may he rest in peace. Thank you for your service!

PS - A special shoutout to the gentleman on the subway beginning his Swensen journey as I was winding mine down. I hope you’re on this website and see this review.

[Dav · Rating 4 out of 5]

I appreciated the insights this book shared, like how even some (many?) institutions are not great at active management. Giving it four stars because it had lots of material that is not as relevant to non-institutional investors. That being said, it was well written.

[Kolin · Rating 3 out of 5]

Main Takeaways:
- Creating a successful portfolio strategy that can consistently, in all markets, create positive returns, is extremely difficult.
- Active management is far more difficult than passive strategies making choosing specific managers and funds very important.
- Endowments differ from many other asset allocations due to the longevity of the fund
- Asset allocation and specific Asset management are key to successful investment strategy

[Ahmed Shabbir · Rating 3 out of 5]

It’s aight

[Vitor Souto · Rating 3 out of 5]

Very insightful book that could have be written in only a hundred pages or less

[Denny Troncoso · Rating 4 out of 5]

Recommended by Buffett. Good nuggets of wisdom about investing. Some stories but sometimes reads like a textbook

[Alex Gravina · Rating 3 out of 5]

This is a classic book on portfolio management but I can't say that it's very interesting. There are some interesting observations on asset classes but that's about it

[Bill Nguyen · Rating 5 out of 5]

The best book regarding institutional manager selection, asset classes, and asset allocation I’ve ever read.