Seventy-Five Years of Investing for Future Generations

This article, written for the 75th Anniversary Edition of the  Financial Analysts Journal , celebrates the central role of endowments in advancing knowledge and practice in investing for the long term. Endowments are investment funds that aim to meet the needs of their beneficiaries over multiple generations and to adhere to the principle of intergenerational equity (Tobin 1974). They are distinctive among investors in having the opportunity to focus on long-term objectives while not having to worry so much about short-term liquidity needs or marketing considerations. In May 1956, the  Analysts Journal  (forerunner of the  Financial Analysts Journal ) published its first article focusing on endowment asset management. It highlighted the approach of these institutions in embracing common stock investing over the prior decades (Carpenter 1956). Subsequently, the styles and strategies of certain university endowments have provided a template that many institutional and individual investors have followed. Goetzmann (2020), in his recent review of some of the key contributions to asset management made by  Financial Analysts Journal , pointed to the development of the so-called endowment model by Yale University and others and their enthusiasm for alternative assets. Although scholars have previously examined the history of insurance companies and mutual funds, little historical analysis of university endowments has been undertaken, notwithstanding the fact that they number among the oldest continuously managed funds in existence.

To read the full article click here  .