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To support local founders, universities should invest in venture capital

September 11, 2017View for printing

In the world of university endowments, everyone wants to be Yale.

That's because over the past two decades Yale's investment officers have consistently generated market-beating returns by shifting a large portion of the university's $25 billion endowment away from traditional stocks and bonds and into alternative investments such as private equity, hedge funds, and venture capital.

Instead of the 4 percent to 5 percent that most institutional investors allot to these sorts of assets, the Yale Model calls for allotments of 25 percent to 30 percent to that class of investment -- a significantly higher percentage that has resulted in significantly outsize returns for the school. Yale has invested in such startups as Uber, Airbnb, and LinkedIn and acknowledges it benefits from enterprising alumni and experienced portfolio managers.

Tim Schigel, Refinery Ventures@schigel ... re-capital/
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