Our Approach

We believe the key to fully harnessing the power of diversification is to allocate capital across multiple external fund managers, each of whom are highly specialized. This approach ensures that we are not overly concentrated in any single risk factor, and provides us with access to a variety of return streams and opportunities. 

When the late David Swensen was appointed CIO of the Yale endowment in 1985, the vast majority of its roughly $1bn portfolio consisted of stocks and bonds. Over the next decade, Swensen and Yale would pioneer a groundbreaking new model of diversification by reallocating capital to alternative investments such as private equity, venture capital, and hedge funds. At the heart of this Yale model is “absolute return” (i.e. hedge funds), which today represent about 20% of Yale’s $40bn+ endowment fund. At VenHedge, we draw inspiration from the Yale approach by diversifying across asset classes, where hedge is a primary source of diversification.

The institutional model of investing pioneered by Yale also includes a considerable allocation to high upside-seeking venture capital investments. At VenHedge, we augment our core hedge fund strategies with a venture-capital overlay that allocates to early-stage opportunities at the cutting edge of innovation and technology.