Yale appoints Matthew Mendelsohn as chief investment officer
Yale President Peter Salovey today announced the appointment of Matthew S. T. Mendelsohn ’07, a veteran of the Yale Investments Office, as the university’s next chief investment officer.
Mendelsohn, 36, succeeds his mentor, David Swensen ’80 Ph.D., who died in May after a nine-year battle with cancer. Swensen led the Yale endowment for more than 35 years, transforming institutional investing the world over, establishing Yale as a global leader in endowment management, and teaching a generation of talented investment professionals. His mentees have gone on to lead the endowments of Princeton, Stanford, MIT, and the University of Pennsylvania, among other major institutions, and now of Yale itself.
The selection of Mendelsohn, a director with current responsibility for venture capital assets comprising more than 25% of Yale’s total endowment, followed an extensive international search by a committee chaired by former Yale provost Ben Polak, the William C. Brainard Professor of Economics.
David Barrett Partners, an executive search firm specializing in asset and wealth management and led by David Barrett ’81, advised the committee.
As of June 30, 2020, Yale’s endowment was valued at more than $31 billion. Spending from the endowment covers about one-third of the university’s annual budget.
“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,” Salovey said in a message to the university community. “And as his former students from Yale’s endowment management course can attest, he welcomes opportunities to impart both the skills and the core values of ethical and successful institutional investing.
“The ‘Yale Model’ of asset allocation and manager selection has changed the world of institutional investment management. With Matt’s leadership, Yale’s exceptional investment team will continue to evolve and set the standard for the field.”
Mendelsohn, a Yale College graduate and CFA charterholder, joined the Investments Office in 2007. Over the last 14 years, he has contributed to the management of most of the asset classes in which Yale invests. In the past 10 years, the venture capital portfolio has returned 21.6% per annum, well in excess of the S&P 500 and relevant private equity benchmarks. He also has extensive experience with asset allocation, risk and liquidity management, and sourcing and developing relationships with Yale’s investment partners.
“The committee left no stone unturned in the search,” said Polak, chair of the seven-member hiring committee. “In the end, the right answer was immediately before us. Matt Mendelsohn has the respect of his colleagues, of managers, and of his peer CIOs — and an extraordinary record of investing, building and leading teams, and representing what is best about Yale.
“Matt shares David’s hallmark qualities: He’s analytically rigorous both in his disciplined approach to asset allocation and in his first-principles approach to specific investments; he has incredible insight into the character and dynamics of his team and of Yale’s outside managers; and he starts from the core belief that everyone involved with the Yale endowment must operate with complete honesty, integrity, and transparency. Ethical and steadfast, tough but kind, a leader and an example to all around him, Matt deeply understands the mission of the university. He appreciates why we’re all here.”
In addition to Polak, the search committee included:
Francis Biondi ’87, member of the Yale Corporation Investment Committee and founder and former managing partner of King Street Capital Management; Michael Cavanagh ’88, investment committee chairman and senior executive vice president and CFO of Comcast; Charles Goodyear IV ’80, investment committee member and president of Goodyear Investment Company; Carter Simonds ’99, investment committee member and former managing director of Blue Ridge Capital; Heather E. Tookes, professor of finance, Yale School of Management; and Douglas A. Warner III ’68, former chairman of the board, JP Morgan Chase & Company, and former investment committee chairman.
Tookes, an expert in capital markets and corporate finance, said:
“Matt’s vision and approach to endowment management are well-aligned with what has already made the Yale Investments Office so strong. I fully expect continued superior manager selection, skillful asset allocation, and attention to risk management. David’s mentorship is obvious in Matt, but so are raw talent and an eye towards the future. We all know that investment opportunities are changing. Not only is the world evolving, but the influx of participants following similar strategies has made markets increasingly competitive. Matt brings forward-looking energy and ideas to an already incredibly strong foundation. I think he would be a successful CIO anywhere. But because his connection to Yale and its mission runs so deep, the incentive to do well for the institution is particularly strong here.”
Raised in St. Louis, Mendelsohn earned a bachelor of science degree in physics from Yale. Upon graduation he was hired by Swensen, whom he first met through Yale’s Berkeley College, where Mendelsohn remains a fellow. From 2013 to 2018, he co-taught a course on endowment management at Yale School of Management with Dean Takahashi, former senior director in the Investments Office and now executive director of Yale’s Carbon Containment Lab.
“I couldn’t have asked for a better set of investors to learn from and work alongside for the past 14 years,” said Mendelsohn, who lives in the New Haven area with his wife, Lauren Martini ’13 Ph.D., and their two children. “From David Swensen, Dean Takahashi, and all of my current and former Investments Office colleagues to the illustrious members of our Investment Committee, Yale benefits from an enormously talented and experienced group of mission-driven investors rooted in time-tested investment principles. Though we will evolve to face new challenges, the future will no doubt rhyme with the past as we build off of a strong foundation.
“I am honored to be given the opportunity to lead this team, whose wonderful professionals are exceptional not simply for their investment talent, but also for their commitment to the principles that guide Yale’s mission. Looking ahead, we will build on the office’s longstanding allegiance to ethical investment practices and develop a diverse team of internal and external investment managers as we seek to continue Yale’s legacy of investment success.”
Swensen oversaw Yale’s endowment from the mid-1980s, when he was in his early 30s, until his death, at 67, in May, growing the value of the portfolio from $1.3 billion to more than $31 billion.
Mendelsohn starts in his new role Sept. 1. He will lead an office of approximately 30 professionals. Alex Banker, the Investments Office director who agreed to lead the office during the search for a permanent successor to Swensen, will return to his full-time duties as director of investments.
“Given the unequaled strength of the team in the Yale Investments Office and Matt’s appointment as its leader,” said Cavanagh, “the Yale endowment is in very good hands.”