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Caliber Financial Partners - CFP

Endowment Model Philosophy

The Endowment Model approach to investing is one that has been made famous by the investment offices of some of the most prestigious colleges and universities in the country. Spearheaded back in 1985 by David Swenson, Portfolio Manager for Yale University's endowment, this model has since been adopted by many institutional investors and family private offices over the last 25 years.

The model challenges the validity of the traditional 60/40 equity/bond portfolio allocation as the optimal allocation to achieve the best risk-adjusted returns in a portfolio over time. As a means for lowering overall market risk and without limiting potential returns, this model incorporates a number of non-traditional asset classes into a portfolio to achieve a higher expected return for investors.

There are material differences between the terms under which endowments and individuals can invest in alternative investments. These differences include, but are not limited to: commissions and fees, conflicts of interest, access to investment opportunities, size, investment time horizons, and the ability to tolerate illiquidity. There is no standard or exact definition of the endowment model. Portfolio design, specific investments, and ultimately performance vary considerably among endowments and investors. Kalos does not claim that any investor will achieve the same result as any endowment, institution, or other investor.