(Bloomberg) — Yale University named an alumnus and protege of late investment chief David Swensen to run the university’s $31 billion endowment and carry out the legendary money manager’s legacy.
Matthew Mendelsohn, 36, will head the second-largest private college endowment in the U.S. — one that’s the envy of peers and institutional investors. He joined the fund after graduating from Yale in 2007 and most recently managed its venture capital assets, which make up more than 25% of the fund. Mendelsohn begins as chief investment officer on Sept. 1.
“In addition to being an exceptional institutional investor, Matt is widely recognized for his ability to build and lead teams and for his devotion to mentoring aspiring investors,” Yale President Peter Salovey said in a message to the New Haven, Connecticut-based university.
Mendelsohn takes over after Swensen, who died in May, transformed the endowment through savvy investments and turned it into one of the best-performing nationwide. Swensen diversified the portfolio, adding private equity, hedge funds and real estate while moving away from plain vanilla assets. The result: Yale ranks first among its peers over the past decade with a 10.9% average annual return, according to data compiled by Bloomberg.
“I couldn’t have asked for a better set of investors to learn from and work alongside for the past 14 years,” Mendelsohn said in a statement.
Mendelsohn will confront rapidly evolving markets as Yale’s CIO, with booms and busts in cryptocurrencies and special purpose acquisition companies, a crackdown in China and other investors flooding hedge funds and private equity firms with cash in an attempt to capture higher returns. Meanwhile, university fund managers face pressure from activists, students and faculty to scrap controversial assets and diversify their ranks.
Mendelsohn is a senior leader of Yale’s asset allocation team and spent nearly a decade helping oversee the endowment’s leveraged buyouts portfolio. He previously helped manage Yale’s domestic and foreign equities, absolute return and natural resources asset classes.
Like Swensen, Mendelsohn is from the Midwest, having been born and raised in St. Louis. After graduating from Yale with a physics degree, he was hired by Swensen. He lives in the New Haven area with his wife, Lauren Martini, who earned a Ph.D. from Yale, and two children.
From 2013 to 2018, Mendelsohn co-taught a course on endowment management at the Yale School of Management with Dean Takahashi, a former senior director in the school’s investments office and now executive director of Yale’s Carbon Containment Lab.
(Updates with market outlook and biography starting in sixth paragraph.)
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