Thursday, 5 June 2008

Yikes! One US University = 18% of Canada

Did you know that the Yale University Endowment Fund in 2007 had net assets of $22 billion (see this article from the NY Times), which is about 18% of the $122 billion that the Canada Pension Plan Investment Board manages on behalf of 17 million Canadians? And Yale's total was the result of posting a 28% return in the year ending June 30, 2007. Meanwhile the CPPIB had a small net loss at the end of its financial year in March 2008. Yale is catching up!

There aren't 18% x 17 million = 3.1 million students at Yale needing to benefit from the endowment fund so the wealth distribution is slightly unbalanced wouldn't you say?

The ongoing long term success of Yale no doubt was a role model in convincing the CPPIB to adopt its very active investing strategy getting into all sorts of things like hedge funds, private equity, private debt and real estate. Take a look at Yale's asset allocation in this article at SeekingAlpha. Not very familiar looking is it? The CPPIB is still evolving its strategy, getting more aggressive and active. Is the Yale model where it is going?

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