Yale Says 'Alpha Is Not Dead'

University's pioneering approach to investments beat the average for foundations and endowments last year, after suffering badly in the recession.

Yale University, the world’s second-wealthiest school with a $20.8 billion endowment, said it can still beat market returns, known as generating alpha, as it seeks to stand out from other investors.

The university’s investment office, run by David Swensen, said in an annual report that “alpha is not dead,” and that it remains committed to allocating much of the portfolio to alternative assets such as private equity. Yale had a 12.5 percent return on investments in the year ended in June, beating the 11.3 percent average for foundations and endowments, according to Wilshire Associates.

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