Familiar with Linsanity? The ‘Linderella’ story of New York Knicks point guard—and Harvard University graduate Jeremy Lin—has entranced millions of basketball and non-basketball fans beyond the New York metropolitan area, beyond the Asian-American market and beyond the NBA subculture.
One of the key points of fan interest in Lin is not simply that his parents emigrated from Taiwan or that he’s upfront about his religious beliefs. No, it’s that he has had a run of athletic triumph as a Harvard grad, for goodness sake.
Yes, seven U.S. presidents have come from Harvard, but when considering the products of the eight Ivy League schools, world-class athletes are not what first comes to mind, despite the athletic prowess of folks like Bill Bradley (Princeton), Calvin Hill (Yale) and Lou Gehrig (Columbia). What does come to mind is excellence in academics, and particularly in the investment arena.
Investment advisors are often called “quarterbacks,” but we would argue that a better metaphor would be as Lin’s position with the Knicks: point guard. After all, just like an advisor, a point guard’s main goal isn’t necessarily to be the highest scorer, but to call the plays and deliver the ball equally to those high scorers. Think of a point guard as an asset allocator, distributing the client’s investment-dollar passes to those with special skills in defense (fixed income), offense (returns) and even the three-point outside shooter who can add alpha points when the team (the client) needs a non-correlating performer (think alternative investments).
So we present for your consideration what we humbly think could be an investment all-star team from the Ivies, highlighting some graduates and academics from the eight Ivy League schools whom you’d want on your investment team. We also took a look at how well their endowments are performing (sorry, Cornell, but you’ve had a little too much turnover among your endowment CIOs of late to make the team, though the 19.9% return in FY 2011 of the sixth largest Ivy League endowment (numbers courtesy of Forbes), at $5.4 billion, was nothing to be ashamed of).
Click here to see a previous AdvisorOne slideshow listing the Top 10 Largest College Endowments.
Choose next to view the first member of our Ivy all-star team.
The Sixth Man:
(aka Hermione Gingold of Harry Potter fame)
Okay, the sixth man is a woman, and a wizard (though not a member of the Orlando Magic, to Dwight Howard’s chagrin). But this Brown University undergraduate has shown her mettle in various Quidditch matches where she came off the bench (well, stayed on the bench) at Hogwarts and used her supernatural powers to allow star players Harry Potter and Ron Weasely to score, or defend.
As for Brown’s endowment prowess, Forbes’ Chris Barth reported that for the 12 months ended June 30, 2011, its endowment of $2.5 billion, the smallest among the eight Ivy schools, had a return of 18.5%, placing it next to last among Ivy endowments in performance for the year.
The Shooting Specialist:
Swensen has been chief investment officer for the Yale endowment since 1985. He received his Ph.D. in economics from Yale and teaches at the Yale School of Management. His approach to investing is like a three-point shooting specialist who also is a franchise player: he makes extensive use of alternatives in the endowment portfolio, gathering around him many of the best investment minds in the business to make sure those alternatives perform as advertised. And the Yale endowment has performed remarkably well (see below). He said at the John Bogle Legacy Forum last month that if you don’t have that same kind of investing support, you should stick with the index investing approach made famous by his fellow All-Ivy teammate, center John Bogle.
So how has Swensen and his team performed? For FY 2011, Yale’s $19.4 billion endowment (second in size only to Harvard in the Ivies) grew by 21.9%.
Yes, the late JoePa’s halo has been tarnished, but he remains the winningest coach in major college football history. He graduated from Brown University in 1950 and eschewed a law career for football. Paterno was famous for his old-fashioned ways and his ability to motivate players to work together as a team. His greatest accomplishment was to provide competitive teams year in and year out, becoming a legend in State College for that consistency and leadership—just like you want to be for your clients.
As shown above, Brown had an 18.5% return on its endowment in FY 2011.
The Power Forward:
When it comes to investing these days, it’s good to have a muscular friend in government who can push aside obstacles. Treasury Secretary Geithner (an 1983 graduate of Dartmouth) not only can work inside the lane, he can also dish it back out to other players, as he helped do with all that stimulus money. Of course, in doing so he could follow the lead of fellow Big Green grad and his predecessor as Treasury Secretary, Hank Paulson (Dartmouth, ’68).
Dartmouth’s endowment, at ‘only’ $3.4 billion, puts it in seventh place among the Ivies; it returned 18.4% in the latest fiscal year.