耶鲁捐赠基金2015年（耶鲁投资办公室年度报告）

The Yale Endowment 2015

Endowment Highlights

Fiscal Year

2015 2014 2013 2012 2011

Market Value (in millions) $25,572.1 $23,894.8 $20,780.0 $19,344.6 $19,374.4 Return 11.5% 20.2% 12.5% 4.7% 21.9%

Asset Allocation (as of June 30)

Endowment Market Value 1950–2015 $30

$25

$20

Billions $15

$10

$5

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Front cover: Stairway in the Yale University Art Gallery’s older wing, designed by Egerton Swartwout (b.a. 1891) and dating to 1926 in a style reminiscent of the Renaissance-era Bargello and the Davanzati Palace in Florence.

Right: The Schwarzman Center Rotunda, between University Commons and Woolsey Hall, designed for the Yale bicentennial celebration in 1901 by the firm Carrère and Hastings, the architects responsible for the New York Public Library.

Contents

Introduction 2 The Yale Endowment 4 Investment Policy 6 Spending Policy 22 Investment Performance 27 Management and Oversight 34

Introduction Yale’s Endowment generated an 11.5% return in fiscal 2015, producing an investment gain of $2.6 billion. Over the past ten years, the Endowment 1 grew from $15.2 billion to $25.6 billion. With annual net ten-year investment returns of 10.0%, the Endowment’s performance exceeded its benchmark and outpaced institutional fund indices. For nine of the past ten years, Yale’s ten-year record ranked first in the Cambridge Associates universe. Spending from the Endowment grew during the last decade from $567 million to $1.1 billion, an annual growth rate of 6.7%. Next year, spending will amount to $1.2 billion, or 34% of projected revenues. Yale’s spending and investment policies provide substantial levels of cash flow to the operating budget for current scholars while preserving Endowment purchasing power for future generations.

Endowment Growth Outpaces Inflation 1950–2015 $28 $26 $24 $22 $20 $18 Billions $16 $14 $12 $10 $8 $6 $4 $2 0 1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 Fiscal Year 1950 Endowment Inflated Post-1950 Endowment Gifts Inflated Endowment Market Value

2

Thirty-Year Performance

In the mid 1980s Yale began moving away from a conventional portfolio model dominated by domestic equities and bonds to a diversified, equityoriented asset allocation that promised higher returns and lower risk. In the past three decades the University’s Endowment more than met expectations, returning 13.9% per annum and exceeding results for traditional marketable asset classes by wide margins. In

comparison, during the period, domestic equities generated 10.7%, foreign equities 8.7%, and domestic bonds 7.1% per annum. The University outperformed the equal-weighted mean return of colleges and universities measured by the National Association of College and University Business O∞cers by 5.0% per annum and bested its passive benchmark by 4.0% per annum over the thirty-year period.

David F. Swensen, Chief Investment Officer, and Dean J. Takahashi, Senior Director of the Yale Investments Office, acknowledge applause at the

David Swensen’s Pioneering Portfolio Management, now in its second edition, discusses the essentials of endowment investing—diversification and equity orientation—which have helped Yale achieve its extraordinary three-decade results.

Yale produced an investment gain of $35.2 billion over the past three decades, while aggregate Endowment gifts reached $3.1 billion. Over the thirty-year period, the aggregate spending distribution to the University’s operating budget totaled $13.9 billion. By responding to the first principles of endowment investing—diversification and equity orientation—Yale produced an extraordinary three-decade record.

announcement of the Swensen Initiative in 2013, which raised more than $35 million for the Yale Endowment.

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The Yale Endowment Totaling $25.6 billion on June 30, 2015, the Yale Endowment contains thousands of funds with various purposes and restrictions. Approximately 2 84% of funds constitute true endowment, gifts restricted by donors to provide long-term funding for designated purposes. The remaining funds represent quasi-endowment, monies that the Yale Corporation chooses to invest and treat as endowment. Donors frequently specify a particular purpose for gifts, creating endowments to fund professorships, teaching, and lectureships (24%); scholarships, fellowships, and prizes (17%); maintenance (4%); books (3%); and miscellaneous specific purposes (27%). Twenty-five percent of funds are unrestricted. Twenty-three percent of the Endowment benefits the overall University, with remaining funds focused on specific units, including the Faculty of Arts and Sciences (37%), the professional schools (26%), the library (7%), and other entities (7%). Although distinct in purpose or restriction, Endowment funds are commingled in an investment pool and tracked with unit accounting much like a large mutual fund. Endowment gifts of cash, securities, or property are valued and exchanged for units that represent a claim on a portion of the total investment portfolio. In fiscal 2015 the Endowment provided $1.1 billion, or 33%, of the University’s $3.3 billion operating income. Other major sources of revenues were medical services of $787 million (24%); grants and contracts of $674 million (20%); net tuition, room, and board of $318 million (10%); gifts of $156 million (5%); and other income and transfers of $281 million (9%).

Endowment Fund Allocation Operating Budget Revenue Fiscal Year 2015 Fiscal Year 2015

Books Other Income and Transfers Maintenance Unrestricted Gifts Endowment Scholarships Tuition, Room, and Board

Professorships Miscellaneous Medical Services Specific Purposes Grants and Contracts

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Entrepreneurship,

Technology, and Yale

The Yale community has long been at the forefront of innovation, technology, and entrepreneurship. University alumni are active members of the global venture capital ecosystem, while faculty, student, and alumni entrepreneurs have developed unique technologies and services, founding some of the world’s most successful and innovative companies. In recent years, Yale’s commitment to innovation has grown as the University has expanded its technology curriculum and entrepreneurship programming. This report highlights only a small sample of Yale’s successful entrepreneurs, technologists, and investors, who strive to transform markets, develop new products and processes, and change the world. In addition, the report features several of the many initiatives undertaken by the University to foster innovation and develop the next generation of technology leaders.

Lee DeForest (b.s. 1896, ph.d. 1899) was a prolific inventor, with more than 300 patents to his name. Most prominently, he is remembered for inventing the audion, a vacuum tube that amplified weak electrical signals and allowed at&t to have nationwide phone service, and that provided sound transmission for radios, tvs, and even early computers. DeForest is known as “the father of radio.”

Yale’s Venture Capital

Portfolio

Venture capital partnerships provide financing and company-building skills to start-up companies with the goal of developing them into substantial, profitable enterprises. Venture capitalists identify and support promising entrepreneurs and start-ups, and successful VCs generate breathtaking returns by backing innovative and disruptive companies from an early stage. Yale was among the first institutional investors to participate in venture capital, making its first commitment in 1976. The University participates through partnerships managed by the nation’s leading venture capital firms, including Andreessen Horowitz, Benchmark, and Greylock Partners, as well as premier firms in China and India.

Yale’s venture capital managers helped to start some of the world’s leading companies. In the 1970s and 1980s, Yale participated in a number of start-ups that defined the technology industry, including Compaq Computer, Oracle, Genentech, Dell Computer, and Amgen. The high-flying 1990s included lucrative investments in Amazon.com, Google, Yahoo!, Cisco Systems, Red Hat, and Juniper Networks. Yale’s more recent investments in Facebook, LinkedIn, Twitter, Uber, Pinterest, Snapchat, AirBnB, JD.com, and Snapdeal illustrate the home-run potential of venture capital investing; for example, the University’s original $2.7 million investment in LinkedIn generated $84.4

One of Yale’s most profitable venture capital investments in recent years was the stake in LinkedIn.

million of gains after the company went public in 2011. Since inception in 1976, Yale’s venture capital portfolio generated a 33.8% annual return. Over the past ten years it has produced a return of 18.0% per annum, outpacing the S&P 500 by 10.1% per annum. The hallmark of Yale’s successful venture capital program has been longterm relationships with the very best managers. By aligning itself with premier firms, the University hopes to continue to generate attractive returns to support Yale’s educational mission.

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Investment Policy Yale’s portfolio is structured using a combination of academic theory and informed market judgment. The theoretical framework relies on mean3 variance analysis, an approach developed by Nobel laureates James Tobin and Harry Markowitz, both of whom conducted work on this important portfolio management tool at Yale’s Cowles Foundation. Using statistical techniques to combine expected returns, variances, and covariances of investment assets, Yale employs mean-variance analysis to estimate expected risk and return profiles of various asset allocation alternatives and to test sensitivity of results to changes in input assumptions. Because investment management involves as much art as science, qualitative considerations play an extremely important role in portfolio decisions. The definition of an asset class is quite subjective, requiring precise distinctions where none exist. Returns and correlations are di∞cult to forecast. Historical data provide a guide, but must be modified to recognize structural changes and compensate for anomalous periods. Quantitative measures have di∞culty incorporating factors such as market liquidity or the influence of significant, low-probability events. In spite of the operational challenges, the rigor required in conducting mean-variance analysis brings an important perspective to the asset allocation process. The combination of quantitative analysis and market judgment employed by Yale produces the following portfolio:

June 2015 June 2015 Asset Class Actual Target

Absolute Return 20.5% 21.5% Domestic Equity 3.9 4.0 Fixed Income 4.9 8.5 Foreign Equity 14.7 14.5 Leveraged Buyouts 16.2 16.0 Natural Resources 6.7 8.5 Real Estate 14.0 13.0 Venture Capital 16.3 14.0 Cash 2.8 0.0

The target mix of assets produces an expected real (after inflation) longterm growth rate of 6.7% with risk (standard deviation of returns) of 13.3%. Because actual holdings di≠er from target levels, the actual allocation produces a portfolio expected to grow at 7.0% with risk of 13.8%. The University’s measure of inflation is based on a basket of goods and services specific to higher education that tends to exceed the Consumer Price Index by approximately one percentage point. At its June 2015 meeting, Yale’s Investment Committee adopted changes to the University’s policy portfolio allocations. The Committee approved increases in the fixed income target from 5% to 8.5%, in the absolute return target from 20% to 21.5%, in the foreign equity target from 13% to 14.5%, and in the natural resources target from 8% to 8.5%.

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The Committee approved decreases in the real estate target from 17% to 13%, in the domestic equity target from 6% to 4%, and in the total private equity target from 31% to 30%. In addition, Yale separated the private equity asset class into leveraged buyouts (16%) and venture capital (14%). Over the longer term, Yale seeks to allocate approximately onehalf of the portfolio to the illiquid asset classes of leveraged buyouts, venture capital, real estate, and natural resources. The Endowment has made significant progress in reducing illiquidity in the years since the financial crisis. Providing resources for current operations and preserving the purchasing power of assets dictate investing for high returns, causing the Endowment to be biased toward equity. The University’s vulnerability to inflation further directs the Endowment away from fixed income and toward equity instruments. Hence, more than 90% of the Endowment is targeted for investment in assets expected to produce equity-like returns, through holdings of domestic and international securities, absolute return strategies, real estate, natural resources, leveraged buyouts, and venture capital. Over the past three decades, Yale dramatically reduced the Endowment’s dependence on domestic marketable securities by reallocating assets to nontraditional asset classes. In 1985, 80% of the Endowment was committed to U.S. stocks and bonds. Today, target allocations call for 12.5% in domestic marketable securities, while the diversifying assets of foreign equity, natural resources, leveraged buyouts, venture capital, absolute return, and real estate dominate the Endowment, representing 87.5% of the target portfolio. The heavy allocation to nontraditional asset classes stems from their return potential and diversifying power. Today’s actual and target portfolios have significantly higher expected returns than the 1985 portfolio with similar volatility. Alternative assets, by their very nature, tend to be less e∞ciently priced than traditional marketable securities, providing an opportunity to exploit market ine∞ciencies through active management. The Endowment’s long time horizon is well suited to exploit illiquid, less e∞cient markets such as venture capital, leveraged buyouts, oil and gas, timber, and real estate.

Branford Court, in Branford College, with Wrexham Tower in background. 7

Yale Alumni Venture Capitalists

Nick Shalek Ping Ping Matt Cohler “My time at Yale and the Yale Investments “Through Yale, I met the people who mat- “There are patterns to entrepreneurship, but O∞ce taught me the value of intellectual tered most in my investment career, because there are no rules. After all, entrepreneurs honesty and surrounding yourself with we valued similar qualities such as intellec- and start-ups that break out to wild success high-quality people. Nothing could be more tual honesty, original thinking, empathy, are by definition exceptions.” important in entrepreneurship or venture curiosity, grace, and focus. Yale’s influence capital. Building a successful technology on my work and life will keep growing in company takes a lot of guts, brains, and the years to come.” time, so the only smart way to do it is to find great partners and be unfailingly honest with yourself about the opportunities and challenges along the way.”

Matt Cohler is a general partner of Benchmark. Cohler has extensive experience working with great entrepreneurs to build lasting consumer Internet companies, having served in senior management roles at Facebook and LinkedIn. Ping Ping is a managing director at Most recently, he served as vice president Nick Shalek is a partner at Ribbit Chengwei Capital. Since joining of product management at Facebook, Capital, a venture capital firm focused on Chengwei in 2003, Ping has been overseeing the company’s product develchanging the world of finance. Prior to responsible for investments across sec- opment organizations. Cohler joined Ribbit, Shalek served as entrepreneur- tors, including consumer, services, Facebook in early 2005 as one of the first in-residence at Aspire Public Schools, Internet and mobile, energy, health care, five employees hired by the company’s where he incubated Schoolzilla, a cloud- and manufacturing. Ping serves as a founders and its first external executive based educational data management and director on the boards of a number of hire. He has been credited with helping analytics platform. Earlier in his career, companies. Before Chengwei, Ping drive Facebook’s strategy, organizational Shalek was a director at Verne Global worked for McKinsey & Company as a growth, and product direction. and a senior analyst at the Yale consultant at its Beijing o∞ce from 1997 Previously, Cohler served as vice presInvestments O∞ce. While at Yale, Shalek to 2000. She worked on strategic and ident and general manager at LinkedIn, was elected to New Haven’s Board of operational projects covering state- where he was a member of the compaAldermen, where he focused his e≠orts owned, private, and multinational com- ny’s founding team. Before LinkedIn, on the city’s economic development and panies. In 2000 Ping joined the founding he was a consultant in McKinsey & education policy. team of an Internet company serving Company’s Silicon Valley o∞ce and As an undergraduate, he was captain business customers with online worked in Beijing for AsiaInfo, the teleof the hockey team and president of the applications. com solutions provider that built China’s Yale Entrepreneurial Society. During Ping received a b.a. in international Internet infrastructure prior to the comShalek’s time in business school, he economics from Peking University in pany’s initial public o≠ering. worked at Facebook, developing partner- 1997 and an m.b.a. from Yale in 2003. Cohler’s investments include 1st dibs, ship and risk management strategies for Asana, Baixing, CouchSurfing, Domo, Facebook Credits. Dropbox, Duo Security, Edmodo, Shalek received a b.a. in economics Greenhouse Software, Instagram, and political science from Yale in 2005 Quora, ResearchGate, Xapo, and and an m.b.a. and an m.a. in education Zendesk. from Stanford in 2011. Cohler received a b.a. from Yale in 2001.

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Yale Alumni Venture Capitalists (continued)

Ann Miura-Ko Miura-Ko received a b.s. in electrical venture capital industry in 1997, Harrick engineering from Yale in 1998 and a worked in new business development for “One of my real joys beyond my work as a ph.d. in math modeling of computer Netscape Communications and in mergventure capitalist is to teach and mentor colsecurity from Stanford in 2010. ers and acquisitions for Morgan Stanley. lege students. Often, seniors will come to me Harrick received a b.a. in history with one or two quarters left in their aca- Steve Harrick from Yale in 1993 and an m.b.a. from demic career to ask me what final classes Harvard in 1997. they should take. I think that they’re expect- “Yale’s emphasis upon diverse and rigorous ing me to push them toward an extra class academic study prepares its students for David Sze on machine learning or data mining. It’s the inevitably changing world that they that Yale education that comes shining encounter upon graduation. As a venture “Anyone reasonably smart will tell you all through in those moments. I tell them that capitalist, I look for talented entrepreneurs the reasons your venture will fail, but only they can take a class on machine learning or who are able to recognize when change you can decide the reasons it will succeed data mining any time in the future. They a≠ords them the opportunity to apply tech- despite the odds.” can learn those skills from books and online nology to solve problems and create excepcourses. What you’ll never get to do again tional companies.” is to learn how to gain a deep appreciation for Paradise Lost or learn the history of the Cold War from someone like Gaddis or learn art history from Scully. It’s these types of classes that build the foundation for character that is so important in any career and has certainly been important in mine.”

David Sze is a partner of Greylock Partners. Sze invests in entrepreneurs who are building companies focused on consumer mobile, Internet services, and media convergence. Sze joined Greylock Partners in 2000. Steve Harrick joined Institutional Before Greylock, he was senior vice presVenture Partners (ivp) as a general ident of product strategy at one of the partner in October 2001 and has more first search pioneers, Excite, and then than eighteen years of venture capital Excite@Home. As an early employee at experience. He focuses on investing in Excite starting in 1996, Sze held roles as later-stage technology companies with general manager of Excite.com and vice Ann Miura-Ko is a co-founding partner exceptional growth potential. Specifi- president of content and programming at Floodgate, where her investment cally, Harrick targets Internet, communi- for the Excite Network. Before Excite, interests include innovations in e-com- cations, and technology-enabled services he worked in product marketing at merce, security, and big data. She has companies that have the potential to Electronic Arts and development at been called “the most powerful woman become leaders in their respective mar- Crystal Dynamics. He started his career in start-ups” by Forbes and is a lecturer in kets. He enjoys working closely with in management consulting for Marakon entrepreneurship at Stanford. The child committed entrepreneurs to create busi- Associates and The Boston Consulting of a rocket scientist at nasa, Miura-Ko nesses that are both respected and revo- Group, and also spent time at hbo. is a Palo Alto native and has been lutionary. Harrick was recognized by Sze’s investments include LinkedIn, steeped in technology start-ups since she Forbes as one of the top one hundred Facebook, Pandora, Nextdoor, Vessel, was a teenager. Prior to Floodgate, she venture capitalists in the world by his Medium, ToyTalk, WhoSay, Jelly, vudu, worked at Charles River Ventures and inclusion in the 2009, 2012, and 2013 Revision3, Digg, Oodle, seven, sgn, McKinsey & Company. Forbes Midas Lists. and New Edge Networks. Since 2011 Sze Some of Miura-Ko’s investments Harrick led ivp’s investments in has been consistently ranked at the top include Lyft, Ayasdi, Xamarin, Aerohive Networks, Ayasdi, of the Forbes Midas List, which recogRefinery29, Chloe and Isabel, Maker Business.com, LegalZoom, MySQL, nizes top vc tech investors. Media, Wanelo, TaskRabbit, and Personal Capital, Spiceworks, and Sze received a b.a. in economics and Modcloth. Tripwire, among other firms. political science from Yale in 1988 and an Miura-Ko is known for her debate Before joining ivp, Harrick worked m.b.a. from Stanford in 1993. skills (she placed first in the National for the Internet Capital Group (icg) as Tournament of Champions in high vice president of acquisitions. Prior to school) and represented Yale in the icg, Harrick worked for Highland Robocup Competition in Paris. Capital Partners. Before entering the

9

Yale Alumni Venture Capitalists (continued)

David B. Singer Roger McNamee Mike Brooks “Entrepreneurship is about balancing an “Entrepreneurship has been a cornerstone of “During my venture capital career I have unwavering optimism that the future can be my American dream. My first start-up been privileged to mentor and support some better than the present, with the sober objec- began at Yale and paid for my undergradu- extraordinary entrepreneurs and their mantivity that is required to make very di∞cult ate and graduate degrees, paving the way for agement teams. A great idea—even if surdecisions. My professional experiences that a very happy life.” rounded by superior talent—only goes so far. required combining optimism and objectivity If I have added value, it is from what I derive inextricably from my time at Yale— learned at Yale: the discipline required in the the academic rigor, the insanely diverse classroom and the competitive drive inspired extracurriculars, and the inspiration of by our coaches, who reinforced the notion watching my friends passionately pursuing that preparation and teamwork improve the their own curiosities.” odds of success.”

Roger McNamee is a co-founder of Elevation Partners. He began his career in 1982 at T. Rowe Price Associates, where he managed the New Horizons Fund. In 1991 he launched Integral Capital Partners, the first crossover fund (combining later-stage venture capital with public market investments), in partnership with Kleiner Perkins David Singer is managing partner of Caufield & Byers and Morgan Stanley. Maverick Capital Ventures, where he is In 1999 McNamee co-founded Silver responsible for Maverick’s venture Lake Partners, the first private equity investments globally. In that role, Singer fund focused on technology businesses. Mike Brooks joined Venrock in 2000 and serves on the boards of several private In 2004 McNamee and his partners served as a partner until 2014. An active, companies in the fields of health care launched Elevation Partners, an invest- successful, and experienced venture capiinformation technology, health care ment partnership focused on the inter- tal investor for over thirty years, he curdelivery, and biotechnology. He serves section of media and entertainment con- rently serves as a consultant and adviser and has served on several public com- tent and consumer technology. to Venrock. pany boards as well. McNamee performs one hundred During his years at Venrock, Brooks Prior to Maverick, Singer was an concerts a year in the bands Moonalice was responsible for investments in colentrepreneur who specialized in health and Doobie Decibel System, in which he legeboard.com, Fogdog, MediaMetrix, care start-ups. He is founder and former plays bass and guitar. Moonalice pio- Message One, Niku Corp., Optinuity, chief executive o∞cer of three health care neered the use of social media in music, Performance Retail, Semtek, Spotlight/ companies—A≠ymetrix, Inc., GeneSoft inventing such applications as Twitter- Profitlogic, Taleo, and USInternetPharmaceuticals, and Corecept cast concerts, Moonalice radio on working. He continues to serve on the Therapeutics, Inc.—in fields ranging Twitter, live Moontunes video concert boards of companies in which Venrock from dna analysis tools to novel thera- streams, and the Moonalice Couch Tour. is a major investor. peutics. He has been a member of the McNamee is the author of The New Prior to Venrock, Brooks spent eleven Rand Corporation’s Health Advisory Normal and The Moonalice Legend: Posters years with Morgan Stanley and fifteen Board, is a Sterling Fellow of Yale and Words, Volumes 1–6. He has served years with J.H. Whitney. His extensive University, and is vice chair of College as a technical adviser for seasons two and background in finance and investing Track. In July 2013, Singer was appoint- three of hbo’s Silicon Valley series. helped provide entrepreneurs in entered by the mayor of San Francisco to be a McNamee is a co-founder of the prise software, financial services, and health commissioner and a member of Tembo Preserve and the Haight Street digital media with unique insights into the San Francisco General Hospital Joint Art Center. He serves on the board of managing and financing rapidly growing Conference Committee. He is a 1997 directors for the Rock and Roll Hall of businesses. He has been recognized sevHenry Crown Fellow of The Aspen Fame Museum. eral times on the Forbes Midas List and Institute. McNamee received a b.a. in history served as a director of the National Singer received a b.a. in history from from Yale in 1980 and an m.b.a. from Venture Capital Association. Yale in 1984 and an m.b.a. from Stanford Dartmouth in 1982. Brooks has been active with not-forin 1988. profit companies and currently serves on

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Yale Alumni Venture Capitalists (continued)

the boards of Hospital for Special ductors and semiconductor equipment,

Surgery, the U.S. Ski and Snowboard biotechnology and medical equipment,

Association, and Greenwood Cemetery. and software.

He is a former trustee of Kent School Currently, Baker serves on the boards

and the U.S. Cycling Development of a number of public and private com-

Foundation, and has been involved in panies, among them Corcept Therapeu-

several capacities with Yale. tics, an early-stage biopharmaceutical

Brooks received a b.a. in history from company, and Youku Tudou, the leading

Yale in 1967 and an m.b.a. from Harvard Chinese Internet video company. He is

in 1973. responsible for Sutter Hill’s investment

in Chengwei Ventures, a venture capital G. Leonard Baker firm in Shanghai that Sutter Hill helped

start in 1999, and in Golden Gate “I graduated from Yale College in 1964 and Capital, a private equity firm in San started my business career in 1966, a time Francisco that Sutter Hill helped found when large, centralized corporations— in 2000. at&t, ibm, Kodak—commanded the econBefore joining Sutter Hill, Baker omy. They believed in size and bureaucratic worked for Cummins Engine Company, methods. Today, companies that have implea manufacturer of diesel engines, and for mented new ideas made possible by technolthe Delta Foundation, a communityogy and globalization—Apple, Facebook, owned, minority business development Alibaba, Tencent—account for the bulk of firm in Greenville, Mississippi. economic value-creation and increasingly Henry McCance is chairman emeritus Baker is a former trustee of Yale dominate stock markets and our daily lives. of Greylock Partners. University, where he chaired the Finance Creative destruction continues to blindside McCance came to Greylock in 1969 Committee. He served on the Yale and supplant traditional firms that try to after serving for two years in the O∞ce Investment Committee from 1990 to protect and milk their past successes. of the Secretary of Defense. He was 2015. He is a member of the Investment “It’s been my luck to witness and partici- responsible for Greylock’s early involveBoard to the Government of Singapore pate in this exceptional half-century of ment in the software industry with his Investment Corporation and is a member entrepreneurial success. The process not only backing of market-leading firms, includof Singapore’s International Academic continues but is speeding up. Yale people ing American Management Systems, Advisory Panel. He is an adviser to the have been deeply involved all along the way. Pansophic, Cullinane, McCormack and Packard Foundation Investment Yale College and successful entrepreneurs Dodge, and VM Software. Committee and Alta Advisers, a London have something important in common: belief Over the ensuing forty years of his family o∞ce. Baker is a board member of in thinking and acting from first principles.” tenure, Greylock has raised a series of the Environmental Defense Fund and a twelve partnerships, with current comtrustee of the Berklee College of Music. mitted capital in excess of $2 billion, and Baker received a b.a. in mathematics helped build approximately 300 developfrom Yale in 1964 and an m.b.a. from ing companies. In recognition, McCance Stanford in 1966. received the National Venture Capital

Association’s Lifetime Achievement Henry McCance Award in May 2004 and, along with

“From my forty-plus-year experience in ven- Greylock’s founding partners, the

ture capital, I have concluded that the most Harvard Business School Award for

important skill is to proactively identify and Alumni Achievement in 2003. In 2000

attract world-class, visionary entrepreneurs. McCance was voted one of the country’s

If you have the right founder, he or she will ten best VCs by Forbes.

make the necessary and inevitable adjust- McCance served on the Greylock

ments to the business plan over the life of the board and led its investment in compa-

venture investment. The truly great entre- nies such as Tellabs, Shiva Corporation,

preneurs are clear thinkers, passionate about Manugistics, Trilogy, ABT Corporation,

their vision, good communicators, willing to Narrative Communications, Gradient

make hard decisions, extraordinarily ener- Technologies, Information Resources,

getic, and convinced that they are on their Epsilon, and Gateway Design. In addi-

life’s mission. The role of the venture capi- tion, he served for twenty-five years on

talist is to support such entrepreneurs by the board of directors of Continental

being their ‘most trusted adviser,’ and being Cablevision.

a value-added resource over the life of the McCance received a b.a. from Yale

Len Baker has been a partner of Sutter venture.” in 1964 and an m.b.a. from Harvard in

Hill Ventures since 1973. He has been an 1966.

active investor in a number of industries,

including entertainment media, semicon-

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Yale Alumni Venture Capitalists (continued)

William H. Draper III With over forty years of experience, California Research Center, Hoover William Draper was one of the first ven- Institution, Freeman Spogli Institute “I have found that the most successful entreture capitalists on the west coast. He for International Studies at Stanford preneurs are like the most successful Yale founded Sutter Hill Ventures, and dur- University, World A≠airs Council of graduates… diligent, smart, well focused, ing his twenty years as the senior part- Northern California, and the United and eager to accomplish something of real ner, he helped to organize and finance Nations Association-USA. Draper forsignificance. As a venture capitalist I have several hundred technology companies. merly served as the chairman of the supported some wonderful entrepreneurs From 1981 to 1986 he served as president World A≠airs Council of Northern with these traits and it has worked out and chairman of the Export-Import California, as chairman of the Institute pretty well.” Bank. In 1986 he became the head of the of International Education, as a trustee world’s largest source of multilateral of Yale University, and as chairman of development grant assistance, the United the board of the American Conservatory Nations Development Program. At Theatre in San Francisco; he is a former present he is the general partner of board member of Population Action Draper Richards, a venture capital fund International, George Bush Library focusing on early-stage technology com- Foundation, the Advisory Council of the panies in the United States, and Draper Stanford Graduate School of Business, International, a venture capital fund and the World Rehabilitation Fund in investing in private companies with New York. He is a member of the operations in the United States and Council on Foreign Relations and the India. He serves as co-chairman of the President’s Council on International Draper Richards Kaplan Foundation, a Activities at Yale University. In 2005 he venture philanthropy firm focused on received the Vision Award from SD start-up non-profit organizations pro- Forum and was inducted into the Dow moting social change. Jones Venture Capital Hall of Fame. In A few years ago, Draper authored 2006 he received the Silicon Valley Fast The Startup Game: Inside the Partnership 50 Lifetime Achievement Award, and the between Venture Capitalists and Entre- Distinguished Service Award from the preneurs. In addition to serving on many Institute of International Education. corporate boards of directors, he has Draper received a b.a. from Yale served on the boards of the Atlantic in 1950 and an m.b.a. from Harvard Council, Harvard Business School in 1954.

The Becton Engineering and Applied Science Center, home of Yale engineering, was designed by Marcel Breuer and erected in 1970. It is named in honor of donor Henry P. Becton (b.s. 1937).

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Asset Class Yale’s eight asset classes are defined by di≠erences in their expected Characteristics response to economic conditions, such as economic growth, price inflation, or changes in interest rates, and are weighted in the Endowment portfolio by considering their risk-adjusted returns and correlations. The University combines the asset classes in such a way as to provide the highest expected return for a given level of risk, subject to fundamental diversification and liquidity constraints.

Absolute Return In July 1990, Yale became the first institutional investor to define absolute return strategies as a distinct asset class, beginning with a target allocation of 15.0%. Designed to provide significant diversification to the Endowment, absolute return investments are expected to generate high long-term real returns by exploiting market ine∞ciencies. The portfolio is invested in two broad categories: event-driven strategies and value-driven strategies. Event-driven strategies rely on a very specific corporate event, such as a merger, spin-o≠, or bankruptcy restructuring, to achieve a target price. Value-driven strategies involve hedged positions in assets or securities with prices that diverge from their underlying economic value. Today, the absolute return portfolio is targeted to be 21.5% of the Endowment, below the average educational institution’s allocation of 24.1% to such strategies. Absolute return strategies are expected to generate a real return of 4.8% with risk of 8.6%. The Barclays 9 to 12 Month Treasury Index serves as the portfolio benchmark. Unlike traditional marketable securities, absolute return investments have historically provided returns largely independent of overall market moves. Over the past twenty years, the portfolio exceeded expectations, returning 10.1% per year with low correlation to domestic stock and bond markets.

Domestic Equity Equity owners reasonably expect to receive returns superior to those produced by less risky assets such as bonds and cash. The predominant asset class in most U.S. institutional portfolios, domestic equity represents a large, liquid, and heavily researched market. While the average educational institution invests 19.4% of assets in domestic equities, Yale’s target allocation to this asset class is only 4.0%. The domestic equity portfolio has an expected real return of 6.0% with a standard deviation of 18.0%. The Wilshire 5000 Index serves as the portfolio benchmark. Despite recognizing that the U.S. equity market is highly e∞cient, Yale elects to pursue active management strategies, aspiring to outperform the market index by a few percentage points, net of fees, annually. Because superior stock selection provides the most consistent and reliable opportunity for generating attractive returns, the University favors managers with exceptional bottom-up, fundamental research capabilities. Managers searching for out-of-favor securities often find stocks that are cheap in relation to fundamental measures such as asset value, future earnings, or cash flow. Over the past twenty years, Yale’s domestic equity portfolio has posted returns of 14.0% per year.

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Fixed Income Fixed income assets generate stable flows of income, providing more certain nominal cash flow than any other Endowment asset class. The bond portfolio exhibits a low covariance with other asset classes and serves as a hedge against financial accidents or periods of unanticipated deflation. In line with the typical educational institution’s allocation to fixed income instruments of 9.3%, Yale’s target allocation to fixed income and cash is 8.5% of the Endowment. Bonds have an expected real return of 0.5% with risk of 3.0%. The Barclays Capital 1 to 3 Year U.S. Treasury Index serves as the portfolio benchmark. Yale is not particularly attracted to fixed income assets, as they have the lowest expected returns of the eight asset classes that make up the Endowment. In addition, the government bond market is arguably the most e∞ciently priced asset class, o≠ering few opportunities to add significant value through active management. Based on skepticism of active fixed income strategies and belief in the e∞cacy of a highly structured approach to bond portfolio management, the Investments O∞ce chooses to manage Endowment bonds internally. Over the past twenty years, the fixed income portfolio has generated returns of 5.1% per annum.

Foreign Equity Foreign equity investments give the Endowment exposure to the global economy, providing diversification and the opportunity to earn outsized returns through active management. Yale allocates 5.5% of its portfolio to foreign developed markets and 9.0% to emerging markets. Yale’s foreign equity target allocation of 14.5% stands below the average endowment’s allocation of 22.1%. Expected real returns for emerging equities are 7.5% with a risk level of 23.0%, while developed equities are expected to return 6.0% with risk of 18.0%. The portfolio is measured against a composite benchmark of developed markets, measured by the Morgan Stanley Capital International (MSCI) Europe, Australasia, and Far East (EAFE) Investable Market Index, and emerging markets, measured by a blend of the MSCI Emerging Markets Investable Market Index and the MSCI China A-Share Investable Market Index. Yale’s investment approach to foreign equities emphasizes active management designed to uncover attractive opportunities and exploit market ine∞ciencies. As in the domestic equity portfolio, Yale favors managers with strong fundamental research capabilities. Capital allocation to individual managers takes into consideration the country allocation of the foreign equity portfolio, the degree of confidence that Yale possesses in a manager, and the appropriate size for a particular strategy. In addition, Yale attempts to exploit mispricings in countries, sectors, and styles by allocating capital to the most compelling opportunities. Twentyyear returns for Yale’s foreign equity portfolio stand at 15.0% per year.

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Leveraged Buyouts Leveraged buyouts o≠er extremely attractive long-term risk-adjusted returns, stemming from the University’s strong stable of managers that exploit market ine∞ciencies. The University’s target allocation to leveraged buyouts of 16.0% far exceeds the 5.9% actual allocation of the average educational institution. The leveraged buyout portfolio is expected to generate real returns of 10.0% with risk of 23.6%. Yale’s leveraged buyout strategy emphasizes partnerships with firms that pursue a value-added approach to investing. Such firms work closely with portfolio companies to create fundamentally more valuable entities, relying only secondarily on financial engineering to generate returns. Investments are made with an eye toward long-term relationships—generally, a commitment is expected to be the first of several—and toward the close alignment of the interests of general and limited partners. Over the past twenty years, the leveraged buyout program has earned 16.4% per annum.

Natural Resources Equity investments in natural resources–oil and gas, timberland, and metals and mining–share common risk and return characteristics: protection against unanticipated global inflation, high and visible current cash flow, and opportunities to exploit ine∞ciencies. At the portfolio level, natural resource investments provide attractive return prospects and significant diversification. Yale has an 8.5% long-term policy allocation to natural resources, with expected real returns of 6.6% and risk of 24.5%. Yale’s current natural resources allocation is slightly above the 7.3% allocation of the average endowment. Superior operators have demonstrated the ability to generate excess returns over a market cycle. Over the past twenty years, Yale’s oil and gas, timber, and mining portfolio has generated an impressive 17.0% per annum.

Real Estate Investments in real estate provide meaningful diversification to the Endowment. A steady flow of income with equity upside creates a natural hedge against unanticipated inflation without sacrificing expected return. Yale’s 13.0% policy allocation significantly exceeds the average endowment’s commitment of 3.7%. Expected real returns are 5.5% with risk of 15.0%. While real estate markets sometimes produce dramatically cyclical returns, pricing ine∞ciencies in the asset class and opportunities to add value allow superior managers to generate excess returns over long time horizons. Over the past twenty years, the portfolio has returned 13.6% per annum.

15

Venture Capital Venture capital investments provide compelling option-like returns as the University’s premier venture managers gain exposure to innovative start-up companies from an early stage. Yale’s venture capital allocation of 14.0% exceeds the 4.6% actual allocation of the average educational institution. The venture capital portfolio is expected to generate real returns of 16.0% with risk of 37.8%. Yale’s venture capital program, one of the first of its kind, is regarded as among the best in the institutional investment community, and the University is frequently cited as a role model by other investors. Yale’s venture capital managers are strong, cohesive, and hungry teams with proven ability to identify opportunities early and support talented entrepreneurs as they build early-stage businesses. The University’s vast experience in venture capital provides an unparalleled set of manager relationships, significant market knowledge, and an extensive network. Over the past twenty years, the venture capital program has earned an outstanding 92.7% per annum.

Asset Allocations Yale Educational as of June 30, 2015 University Institution Mean

Absolute Return 20.5% 24.1% Domestic Equity 3.9 19.4 Fixed Income 4.9 9.3 Foreign Equity 14.7 22.1 Leveraged Buyouts 16.2 5.9 Natural Resources 6.7 7.3 Real Estate 14.0 3.7 Venture Capital 16.3 4.6 Cash 2.8 3.7

Note: Educational Institution Mean values sum to 100.1% due to rounding.

The home of Computer Science at Yale, Watson Center. In 1961, Mrs. Thomas J. Watson and her son, Arthur K. Watson (b.a. 1942), donated Watson Hall to house the first Yale Computer Center in memory of Thomas J. Watson, founder of ibm. 16

Yale Alumni Entrepreneurs

Jennifer Fleiss Fleiss received a b.a. in political Service and a 2007 brick Award, which science from Yale in 2005 and an m.b.a. honors and funds change-makers who “Entrepreneurship is about going after your from Harvard in 2009. identify problems and work to change dreams with unrelenting determination, the world. pushing the limits, and having the persist- Jennifer Staple-Clark Staple-Clark is a member of the Yale ence to handle the inevitable bumps in the University President’s Council on Interroad. Yale exposed me to so many opportuni- “My Yale experience was transformational. national Activities and is on the operating ties and taught me that it was up to me to I was immersed in an intellectually stimulatboard of the Yale Entrepreneurial take initiative in molding these opportunities ing environment that promoted the entrepreInstitute. to meet my needs—the foundational learning neurial spirit. The most essential lesson in Staple-Clark received a b.s. in molecof entrepreneurship.” entrepreneurship is the importance of focusular, cellular, and developmental biology ing on quality, and not just innovation for from Yale in 2003. the sake of innovation. Identify how your dedication and passions can help to advance Jake Schwartz new, e≠ective ideas.” “Yale helped form my world view, and though I didn’t know I was going to be an entrepreneur at the time, I can now see how each element of my experience there influenced the path that led me here. Yale’s culture of student initiative, leadership, and creativity empowered me to shape my own journey after college, and it’s that spirit of empowerment that we seek to inspire at General Assembly every day.”

Jennifer Fleiss is the co-founder and head of special projects at Rent the Runway, a fashion technology company providing designer dress and accessory rentals pow- In 2000 Jennifer Staple-Clark, then a ered by proprietary technology and a sophomore at Yale, founded Unite For unique reverse-logistics operation. Rent Sight in her dorm room. Unite For Sight the Runway seeks to change the meaning is now a leader in global health education of ownership and revolutionize retail. and in providing cost-e≠ective care to the Fleiss currently works on Rent the world’s poorest people. It has provided Runway’s business evolution and opti- eye care to two million people in North mization projects as well as strategic America, Africa, and Asia and has trained partnerships with brands. Before she met nearly 10,000 Global Impact Fellows to co-founder Jennifer Hyman at Harvard eliminate preventable blindness in their Business School, Fleiss held positions at local community and abroad. Morgan Stanley and Lehman Brothers. Staple-Clark is the recipient of the Since starting Rent the Runway in 2009, 2011 John F. Kennedy New Frontier Jake Schwartz is the co-founder and chief she has been honored with several indus- Award, presented by the John F. Kennedy executive o∞cer of General Assembly, try recognitions including Inc. Magazine’s Library Foundation and the Institute of started in 2011 as a community for entre“30 Under 30,” Fortune’s “40 Under 40” Politics at Harvard’s Kennedy School of preneurs and start-up companies in New and “Most Powerful Women Entre- Government, and the 2015 Vision Award, York City. The company now o≠ers fullpreneurs,” Forbes’s “12 Most Disruptive presented by Middlebury College’s time immersive programs, long-form Names in Business,” Business Insider’s Center for Social Entrepreneurship. courses, classes, and workshops on tech“35 Under 35,” and Fast Company’s “Most Staple-Clark received the Yale School of nology, business, and design at fourteen Influential Women in Technology.” Fleiss Public Health’s Centennial Leadership campuses across four continents, where it is co-founder of The rtr Foundation, Innovation Award and the Praxis Award has taught more than 300,000 students. which supports female entrepreneurs, an in Professional Ethics from Villanova Schwartz was named E&Y Entreadviser to several female-run businesses, University. She received the American preneur of the Year in New York, and and a guest lecturer at Yale, Columbia, Institute of Public Service’s 2009 was recently named one of Crain’s “40 Princeton, and Harvard Business School. National Je≠erson Award for Public under 40.”

17

Yale Alumni Entrepreneurs (continued)

Schwartz received a b.a. in American Wojcicki received a b.s. in biology Tsai serves on the boards of directors of studies from Yale in 2000 and an m.b.a. from Yale in 1996. several of Alibaba’s investee companies. in entrepreneurial management from Tsai received a b.a. in economics and Wharton in 2008. Joe Tsai East Asian studies from Yale in 1986 and a j.d. from Yale in 1990. “Yale’s liberal arts approach taught me that Anne Wojcicki anything is possible. As an entrepreneur in Kevin P. Ryan “My days at Yale opened my eyes to new technology, you not only have to adapt to ways of seeing the world. Thanks to those change, but also create change. I support “The core skills that allowed me to launch experiences and my friends, I left Yale with Computer Science and Engineering at Yale many Internet companies over the past confidence, a desire to improve the world, because they provide the tools for liberal arts twenty years were learned and nurtured at and a willingness to take risk.” graduates to make disruptive impact.” Yale. I am glad Yale is even more focused than ever on developing entrepreneurial instincts. The impact is already being felt and will continue to grow.”

Joe Tsai was a member of the Alibaba Getting access to and understanding her Group’s founding team and has served as own genetic information has always been executive vice chairman since May 2013. one of Anne Wojcicki’s ambitions. She He previously served as chief financial Kevin Ryan is one of the leading Internet co-founded 23andMe in 2006 after a o∞cer and has been a member of the entrepreneurs in New York. He is the decade spent in health care investing, board of directors since Alibaba’s forma- founder and chairman of several busifocused primarily on biotechnology com- tion in China in 1999. The company’s nesses, including Business Insider, panies. Her hope was to empower con- eighteen founders shared a belief that the MongoDB, gilt, and Zola. Combined, sumers with access to their own genetic Internet would level the playing field by these companies have raised more than information and to create a way to gener- enabling small enterprises to leverage $500 million in venture capital funding ate more personalized information so that innovation and technology to grow and and currently employ almost 2,000 peocommercial and academic researchers compete more e≠ectively in the domestic ple. Previously, Ryan helped build could better understand and develop new and global economies. Today, Alibaba DoubleClick from 1996 to 2005, first as drugs and diagnostics. At present, operates leading online and mobile e- president and later as ceo. He led 23andMe has built one of the world’s commerce marketplaces, cloud computing DoubleClick’s growth from a twenty-perlargest databases of individual genetic and payment platforms, and other ser- son start-up to a publicly traded global information. Its novel, Web-based vices. Its 2014 initial public o≠ering on leader with over 1,500 employees. In 2013 research approach allows for the rapid the New York Stock Exchange became the Ryan was named one of “The 100 Most recruitment of participants to many largest in history, raising $25 billion. Influential New Yorkers of the Past 25 genome-wide association studies at once, From 1995 to 1999, Tsai worked in Years” by The Observer. reducing the time and money needed to Hong Kong with Investor ab, where he Ryan serves on the board of Human make new discoveries, and the company was responsible for Asian private equity Rights Watch, is vice chairman of The has created a proven and standardized investments. Prior to that, he was vice Partnership for New York City, and is a resource for finding new genetic associa- president and general counsel of member of the Council on Foreign tions and confirming genetic loci discov- Rosecli≠, Inc., a management buyout Relations. He previously served on the ered by others. Under Wojcicki’s leader- firm based in New York. From 1990 to boards of insead, the Direct Marketing ship, 23andMe has made significant 1993, Tsai was an associate attorney in the Association, The Ad Council, HotJobs, advances in bringing personalized tax group of Sullivan & Cromwell llp, a and the advisory board of Doctors medicine directly to the public. New York-based international law firm. Without Borders.

18

Yale Alumni Entrepreneurs (continued)

Ryan received a b.a. in economics Prior to RealNetworks, Glaser spent After graduating from business school, from Yale in 1985 and an m.b.a. from ten years at Microsoft in a number of Dubinsky worked at Apple Computer insead in 1990. He is a fellow of the roles, including vice president of and then as a founder of Claris CorporYale Corporation. Multimedia and Consumer Systems. ation. In 1992 she joined Je≠ Hawkins at Under his guidance, Glaser’s team set the Palm Computing, serving as president Rob Glaser engineering and commercial standard for and chief executive o∞cer. The handheld integrating multimedia hardware and computer, the PalmPilot, introduced four “I am grateful for all of the ways my Yale software into PCs. years later, became the fastest-selling education prepared me for my adult life and Glaser has served on several non- computer and consumer electronics prodthe entrepreneurial path I chose. In addition profit boards and committees, including uct. Dubinsky remained Palm’s president to what I learned academically, Yale stimuan appointment by President Clinton to and chief executive o∞cer throughout its lated me to think rigorously and globally the Advisory Committee on Public acquisition by U.S. Robotics and subseabout the world around me. Perhaps most Interest Obligations of Digital Television quently by 3Com Corporation. uniquely, my Yale experience encouraged me Broadcasters and as a member of the In 1998 Dubinsky and Hawkins to juxtapose the world of the possible and the digital advisory committee for the Broad- founded Handspring, Inc., creator of the world of the actual in ways that stimulated casting Board of Governors. Glaser also Treo Smartphone, which set the standard me to never accept the status quo as immutserves as chairman of the Glaser Progress for next-generation phones. Handspring able, and to find new ways of doing things Foundation and the RealNetworks merged with Palm in 2003, and Dubinsky that hadn’t been done before.” Foundation. served as a director until early 2009. She Glaser received a b.s. in computer and Hawkins founded Numenta science and an m.a. in economics from in 2005. Yale in 1983. Dubinsky received a b.a. in history from Yale in 1977 and an m.b.a. from Donna Dubinsky Harvard in 1981. She is a fellow of the Yale Corporation. “I’ve had an amazing career at the forefront of four major generations of computing: perBing Gordon sonal computing, handheld computing, smartphones, and intelligent computing. You “The most important element of your investcan’t be trained to create new markets. Yale’s ment pitch is not a slide; it’s you.” education gave me the tools I needed to be both creative and analytical as we figured out how to create breakthrough products in new markets.”

Rob Glaser—founder, chairman, and ceo of RealNetworks—is an Internet, technology, and media pioneer. RealNetworks was the first company to introduce streaming on the Internet with its groundbreaking RealAudio product in 1995. RealNetworks has continued to innovate and create compelling digital media products and services, including, most recently, its innovative RealTimes® product introduced in 2015. Glaser founded Real in 1994 and Bing Gordon was a long-time executive served as chief executive o∞cer until at Electronic Arts, beginning with ea’s January 2010. During that time, Glaser founding in 1982. He served as chief successfully steered the company through creative o∞cer at ea from 1998 to 2008 its initial public o≠ering and through fif- and previously headed ea marketing and teen years of growth. In July 2012 Glaser Donna Dubinsky is chief executive product development. Gordon drove ea’s returned to Real as chief executive o∞cer o∞cer, board chair, and co-founder of branding strategy with ea Sports, develto help lead the company through its Numenta, Inc., a software company that oped ea’s pricing strategy for package next period of transformation and creates fundamental technology designed goods and online games, created ea’s innovation. to lead the coming era of machine studio organization, and contributed to intelligence. the design and marketing of many ea

19

Yale Alumni Entrepreneurs (continued)

franchises, including John Madden and/or communities of color in the added sectors of the economy Smith had Football, The Sims, Sim City, Need for United States. predicted. The company has since grown Speed, Tiger Woods Golf, Club Pogo, Kapor is a pioneer of the personal into a $45 billion global enterprise. and Command and Conquer. Gordon computing industry, a serial entrepre- Smith is responsible for providing was a founding director at ngmoco and neur, and a long-time angel investor. strategic direction for all FedEx operatAudible, and held the game industry’s He founded Lotus Development Corpo- ing companies: FedEx Services (includfirst university chair at the University of ration and designed Lotus 1-2-3, the ing FedEx O∞ce), FedEx Express, FedEx Southern California School of Cinematic “killer application” that made the per- Ground, and FedEx Freight. FedEx Arts. sonal computer ubiquitous in the busi- serves more than 220 countries and terriGordon joined venture capital firm ness world in the 1980s. He is the co- tories with operations that include 634 Kleiner Perkins Caufield & Byers in 2008 founder of The Electronic Frontier aircraft and over 90,000 vehicles. More and serves as general partner and chief Foundation, which protects freedom and than 350,000 team members worldwide product o∞cer for the firm, leading privacy on the Internet, and was the currently handle more than 11 million kpcb ProductWorks, a new program founding chair of the Mozilla Foun- shipments each business day. that brings together talent and experi- dation, creator of the open source Web FedEx has been widely acknowledged ence to help entrepreneurs build success- browser Firefox. for its commitment to total quality servful products and services. Gordon leads He serves as co-chair of the Kapor ice. FedEx Express was the first service kpcb’s sFund, the investment initiative Center for Social Impact and as interim company to win the Malcolm Baldridge to fund and build applications and serv- president of the Level Playing Field National Quality Award in 1990. FedEx ices that deliver on the promise of the Institute. has consistently been ranked on Fortune social Web. Gordon serves on the board Kapor received a b.a. from Yale in magazine’s industry lists, including of directors of Amazon, Zynga, Zazzle, 1971. “World’s Most Admired Companies,” Airtime, and N3twork. Gordon’s addi- “100 Best Companies to Work For,” and tional investments include DuoLingo, Frederick W. Smith “Blue Ribbon Companies List.”

Fleksy, Jawbone, Betterworks, and Smith is co-chair of the Energy “Leadership is the ability of an individual Spotify. Security Leadership Council, a trustee that can coalesce the e≠orts of a group of Gordon received a b.a. from Yale in for the United States Council for individuals toward achieving organizational 1972 and an m.b.a. from Stanford in International Business, and a member of goals… At the end of the day, culture is 1978. 1 both the Business Council and Business everything.” Roundtable. He served as chairman of Mitch Kapor the U.S.-China Business Council and

co-chair of the French-American “Building a workplace that engages a Business Council. Smith has served on diversity of employees and brings out their the boards of several large public compabest makes a far greater contribution than nies and a number of charitable organifinancial success alone.” zations, including St. Jude Children’s Research Hospital and the Mayo Foundation. He formerly chaired the board of governors for the International Air Transport Association and the executive committee of the U.S. Air Transport Association. Smith has received several honorary degrees and numerous civic, academic, and business awards, including the Global Leadership Award from the U.S.-India Business Council and the Circle of Honor Award from the Congressional Medal of Honor Born in 1944 in Marks, Mississippi, Foundation. He is a member of the Frederick W. Smith is the founder and Aviation Hall of Fame and the Business chief executive o∞cer of FedEx Hall of Fame. He served as co-chairman Corporation. He performed the original of both the U.S. World War II Memorial analyses of the logistics needs of a highly project and the campaign for the automated future society during his National Museum of the Marine Corps. undergraduate years. He has been named a top chief executive Mitch Kapor is the managing partner After four years of service in the o∞cer by both Barron’s and Chief of Kapor Capital, an Oakland-based Marines, including two tours of duty in Executive magazines. venture firm that invests in tech-driven Vietnam, he launched the original airSmith received a b.a. from Yale seed-stage companies committed to ground Federal Express network, which in 1966. closing gaps of access, opportunity, or began operations in 1973 to serve the outcome for low-income communities rapidly growing high-tech/high-value- 1 Frederick W. Smith, second annual Stump Entrepreneurship Lecture, Birmingham-Southern College, April 2012, https://www.youtube.com/watch?v=R2LkpuIZlI8 at 48:30 and 40:40.

20

Yale Alumni Entrepreneurs (continued)

Early Yale Entrepreneurs: Eli Whitney, Henry R. Luce, and Juan Trippe

Yale alumni have a long tradition of entrepreneurship and innovation. Eli Whitney (b.a. 1792, m.a. 1795) designed a cotton gin for cleaning green-seed cotton and secured a patent of his invention in 1794. He later developed the concept for mass production of interchangeable parts deployed in assembling muskets. Henry R. Luce (b.a. 1920) and Briton Hadden (b.a. 1920) founded Time, America’s first news magazine, in 1923. Luce went on to found Fortune, Life, and Sports Illustrated, and to build a publishing empire that made him one of the most influential figures of the twentieth century. Juan Trippe (b.a. 1921), who enlisted in the Navy after his freshman year and later led Yale’s flying club, founded Pan American World Airways, spearheading the development of the airline industry and making air travel more a≠ordable.

Publishing magnate Henry R. Luce (b.a. 1920), front row, second from left, with the board of the Yale News during his undergraduate days.

Inventor Eli Whitney (b.a. 1792, m.a. 1795) in an Juan Trippe (b.a. 1921), founder of Pan American 1822 oil portrait by Samuel F. B. Morse (b.a. 1810). World Airways, is shown with Charles A. Lindbergh in British Guiana in 1929.

21

Spending Policy The spending rule is at the heart of fiscal discipline for an endowed institution. Spending policies define an institution’s compromise between the 4 conflicting goals of providing support for current operations and preserving purchasing power of endowment assets. The spending rule must be clearly defined and consistently applied for the concept of budget balance to have meaning. The Endowment spending policy, which allocates Endowment earnings to operations, balances the competing objectives of providing a stable flow of income to the operating budget and protecting the real value of the Endowment over time. The spending policy manages the trade-o≠ between these two objectives by combining a long-term spending rate target with a smoothing rule, which adjusts spending in any given year gradually in response to changes in Endowment market value. The target spending rate approved by the Yale Corporation currently stands at 5.25%. According to the smoothing rule, Endowment spending in a given year sums to 80% of the previous year’s spending and 20% of the targeted long-term spending rate applied to the fiscal year-end market value two years prior. The spending amount determined by the formula is adjusted for inflation and constrained so that the calculated rate is at least 4.5%, and not more than 6.0%, of the Endowment’s inflation-adjusted market value two years prior. The smoothing rule and the View from Cross Campus toward the main entrance diversified nature of the Endowment are designed to mitigate the impact of Sterling Memorial Library. Designed by James Gamble Rogers (b.a. 1889), sml was built with of short-term market volatility on the flow of funds to support Yale’s funds from the bequest of John W. Sterling (b.a. 1864) and opened in 1931. operations.

22

The spending rule has two implications. First, by incorporating the prior year’s spending, the rule eliminates large fluctuations, enabling the University to plan for its operating budget needs. Over the last twenty years, the standard deviation of annual changes in actual spending has been approximately 70% of the standard deviation of annual changes in Endowment value. Second, by adjusting spending toward the long-term target spending level, the rule ensures that spending will be sensitive to fluctuating Endowment market values, providing stability in long-term purchasing power. Despite the conservative nature of Yale’s spending policy, distributions to the operating budget rose from $567 million in fiscal 2005 to $1.1 billion in fiscal 2015. The University projects spending of $1.2 billion from the Endowment in fiscal 2016, representing approximately 34% of revenues.

Spending Growth Surpasses Inflation 1950–2015 $1,400

$1,200

$1,000 Millions $800

$600

$400

$200

1950 Spending Inflated Spending from Post-1950 Endowment Gifts Inflated Actual Spending

23

Entrepreneurial Organizations

Yale Entrepreneurial Institute

The Yale Entrepreneurial Institute (yei) is an organization that helps entrepreneurs and innovators at Yale start scalable new ventures. yei is dedicated to fostering entrepreneurship across all schools at Yale and providing opportunities for students and faculty to test their ideas, develop them with expert guidance, and launch companies that can make an impact in their respective industries. yei resources include a Mentor Network; resident entrepreneurs; inkind services from corporate partners in legal, accounting, financial, ip, communications, and branding; connections to the angel and venture community; and connections to campus and community entrepreneurship partners. yei offers three dedicated programs m.b.a. candidate Paul-Renaud Raymond partici- student entrepreneurs make presentations about for accelerating ventures: the Venture pated in a yei “pitch,” a competition in which their start-ups. Creation Program, the yei Fellowship, are eligible for additional support. The yei Innovation Fund offers preand the yei Innovation Fund. The yei Fellowship is a competitive seed funding to select yei start-ups. Ten yei’s Venture Creation Program was ten-week program for Yale’s most prom- teams have received $100,000 from the created to catalyze and support the ising student start-ups. An intensive fund since it launched in 2013 and have growth of new, early-stage ventures at bootcamp, the Fellowship helps students gone on to collectively raise $17 million Yale from students and faculty by pro- launch and grow their new business ven- in follow-on funding. viding resources for entrepreneurial tures with an award of $15,000 in grant There are currently one hundred teams to commercialize promising, funding, business fundamental and lean active yei companies that have raised unique products or services for which start-up skills, and connections with more than $150 million in funding and there is a customer or market demand. experienced mentors and investors in created over four hundred jobs. Mission-based teams with global reach yei’s network.

yei Fellows 2015, during the annual ten-week start-ups with $15,000 along with mentorship, summer bootcamp that provides select Yale education, and pitching opportunities.

24

Entrepreneurial Organizations (continued)

O∞ce of Cooperative Research

The O∞ce of Cooperative Research developer; Axerion Therapeutics, a (ocr) was founded in 1982 to foster biotechnology company focused on commercial investment in the develop- developing innovative therapeutics for ment of inventions and discoveries neurological diseases and injuries; flowing from faculty research at Yale. CoolSpine, a medical device company ocr facilitates the translation of that has developed a cerebral spinal fluid research from Yale’s labs into products cooling platform designed to induce and services that benefit society. In its localized hypothermia and prevent neucommitment to technology transfer, rological injuries; Hadapt, a start-up that ocr’s mission is closely aligned with has developed the industry’s only big Yale’s mission to create, preserve, and data analytic platform natively integratdisseminate knowledge. ocr has built a ing sql with Apache Hadoop; IsoPlexis, Achillion and Oasys Water are among companies significant portfolio of inventions and a proprietary single-cell immunoassay recently created in conjunction with Yale’s O∞ce patents and has grown into an engine of and software suite; Oasys Water, a of Cooperative Research. regional economic development by iden- provider of integrated forward osmosis tifying, counseling, and nurturing early- systems for high-recovery desalination; stage technologies and guiding the tran- and Sonic Golf, a creator of electronically sition into robust companies. enabled, intelligent golf clubs. ocr’s portfolio includes Achillion Pharmaceuticals, a small-molecule drug

Sean Mackay (m.b.a. 2014) and Rong Fan, are shown in the lab of IsoPlexis, a company they Cooperative Research to develop devices and softAssociate Professor of Biomedical Engineering, co-founded in association with the Yale Office of ware to study immune and cancer cell activity. 25

Entrepreneurial Organizations (continued)

Program in Innovative Therapeutics for Connecticut’s Health

The Program in Innovative Therapeutics leadership, bridging the worlds of The e≠ort will engage Yale’s Center for Connecticut’s Health (pitch) will academia, biopharma, and venture for Molecular Discovery at the West structure and oversee the creation of capital. pitch will help the state’s aca- Campus, UConn’s School of Pharmacy, new biopharma and biotechnology ven- demic researchers translate Connecticut’s and UConn Health to create a new, tures in Connecticut based on research research into innovative therapeutic multi-centered statewide academic drug from the state’s higher education system. strategies, treatments, new ventures, discovery consortium. pitch, a collaboration between Yale and jobs. and the University of Connecticut, was funded by a $10 million grant from the Connecticut Bioscience Innovation Fund, managed by Connecticut Innovations. The program, led by Craig Crews of Yale and Dennis Wright of UConn, will build on significant academic infrastructure and experienced

Craig Crews, the Lewis B. Cullman Professor of A researcher at Arvinas, one of the start-ups foundMolecular, Cellular, and Developmental Biology ed by Professor Craig Crews, whose activity won and Professor of Chemistry at Yale, is co-director him the title of Connecticut Entrepreneur of the of pitch, a new Connecticut joint venture. Year in 2013.

Elm Street Ventures

Elm Street Ventures (esv), founded in AxioMx, a custom monoclonal antibody an educational software developer 2006 by Rob Bettigole (b.s. 1976, m.b.a. producer; Arvinas, a novel therapeutic founded by Yale undergraduates and 1983), is a seed- and early-stage venture developer based on research from the incubated at yei. fund based in New Haven. esv focuses Yale lab of Craig Crews; and Desmos, on creating companies founded on intellectual property developed at Yale and other research institutions in the region. The fund emphasizes the life sciences, with approximately 70% of its investments in companies developing laboratory tools, diagnostics, medical devices, therapeutics, and other health-carerelated products and services. The remaining 30% of its commitments are in green technology, information technology, and other industries. By providing management expertise and early-stage capital, esv catalyzes new company formation, working closely with scientists, engineers, and entrepreneurs to build significant technology companies from the seed and early stage. esv’s portfolio includes P2 Sciences, a Scientists Tania Salam and Yonghua Yang, of greengreen-chemistry bio-refinery company; chemistry firm P2 Sciences.

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Investment Performance Yale has produced excellent long-term investment returns. Over the tenyear period ending June 30, 2015, the Endowment earned an annualized 5 10.0% return, net of fees, surpassing annual results for domestic stocks of 8.2% and domestic bonds of 4.4%, and placing Yale among the top 2% of colleges and universities. Endowment outperformance stems from sound asset allocation policy and superior active management. Yale’s long-term superior performance relative to its peers and benchmarks creates substantial wealth for the University. Over the ten years ending June 30, 2015, Yale added $8.0 billion relative to the average return of a broad universe of college and university endowments and $6.8 billion relative to its passive benchmark.

Yale’s Performance Exceeds Peer Results June 30, 2005 to June 30, 2015, 2005=$100 $300

$100 $200 of Growth

$100

Endowment Mean of Broad Universe of Colleges and Universities Inflation

Since opening in 2012, the Center for Engineering Innovation and Design (ceid) has served as the hub for collaborative design and interdisciplinary activity at Yale. Students, staff, and faculty have access to ceid resources, participate in courses and events, and collaborate on a wide range of projects. 27

Performance by Yale’s long-term asset class performance continues to be outstanding. In Asset Class the past ten years, every asset class posted superior returns, outperforming benchmark levels. Over the past decade, the absolute return portfolio produced an annualized 7.2% return, exceeding the passive Barclays 9 to 12 Month Treasury Index by 5.3% per year and besting its active benchmark of hedge fund manager returns by 3.0% per year. For the ten-year period, absolute return results exhibited little correlation to traditional marketable securities. The domestic equity portfolio returned an annualized 12.3% for the ten years ending June 30, 2015, outperforming the Wilshire 5000 by 4.1% per year and the Russell Median Manager return, net of estimated fees, by 4.3% per year. Yale’s active managers have added value to benchmark returns primarily through stock selection. Yale’s internally managed fixed income portfolio earned an annualized 3.0% over the past decade, keeping pace with the passive index and exceeding the Russell Median Manager return, net of estimated fees, by 0.2% per year. Because the fixed income portfolio serves as the University’s primary source of liquidity, the Endowment generally forgoes opportunities to generate excess returns. The foreign equity portfolio generated an annual return of 17.4% over the ten-year period, outperforming its composite passive benchmark by 8.4% per year and the Russell Median Manager return, net of estimated fees, by 10.4% per year. The portfolio’s excess return is due to astute country allocation and e≠ective security selection by active managers. Leveraged buyouts generated an annualized 13.4% return over the decade, outperforming the composite passive benchmark by 5.0% per year and outperforming the pool of buyout and growth equity managers compiled by Cambridge Associates by 0.8% per year. Leveraged buyout performance demonstrates the value of superior active management. Yale’s natural resources portfolio produced an annualized return of 10.5% over the past decade, surpassing its composite passive benchmark by 5.5% per year and the Cambridge Associates natural resources manager pool by 1.5% per year. Yale’s strong performance results from partnership with superior operators. Real estate generated a 6.2% annualized return over the ten-year period, outperforming the msci u.s. reit Index by 0.6% per year and a pool of Cambridge Associates real estate managers by 0.6% per year. Yale’s outperformance is due to successful exploitation of market ine∞ciencies and timely pursuit of contrarian investment strategies. The venture capital portfolio earned an annualized return of 18.0% for the ten years ending June 30, 2015, exceeding its composite passive benchmark by 8.6% per year and the Cambridge Associates venture capital manager pool by 6.5% per year. Yale’s venture capital program focuses on premier firms that are likely to generate superior returns by emphasizing a value-added approach.

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Yale Asset Class Results Beat Most Benchmarks June 30, 2005 to June 30, 2015

20%

18%

16%

14%

12%

10%

8%

6%

4%

2%

0% Absolute Domestic Fixed Foreign Leveraged Natural Real Venture Return Equity Income Equity Buyouts* Resources* Estate* Capital*

Yale Return Active Benchmark Passive Benchmark

• Yale Returns and Active Benchmarks are dollar-weighted.

Active Benchmarks Passive Benchmarks Absolute Return: Credit Suisse Composite Absolute Return: Barclays 9-12 Month Treasury Domestic Equity: Frank Russell Median Manager, U.S. Equity, Domestic Equity: Wilshire 5000 with fee adjustment of 78 basis points per annum Fixed Income: Barclays 1-3 Year Treasury (Barclays 1-5 Year Fixed Income: Frank Russell Median Manager, Fixed Income, Treasury from July 2008 to September 2013, LB with fee adjustment of 34 basis points per annum Treasury Index from July 2005 to June 2008) Foreign Equity: Frank Russell Median Manager Composite, Foreign Equity: Blend of MSCI EAFE Investable Market Index, Foreign Equity, with fee adjustment of 79 basis points MSCI Emerging Markets Investable Market Index, MSCI per annum for developed equity and 98 basis points per China A-Share Investable Market Index annum for emerging equity Leveraged Buyouts: Blend of Russell 2000, MSCI ACWI ex-U.S. Leveraged Buyouts: Cambridge Associates Leveraged Buyouts Small-Cap Index Composite Natural Resources: Blend of Custom Timber REIT Basket, S&P Natural Resources: Cambridge Associates Natural Resources O&G Exploration & Production Index, Euromoney Global Composite Mining Index Real Estate: Cambridge Associates Real Estate Real Estate: MSCI U.S. REIT Index Venture Capital: Cambridge Associates Global Venture Capital Venture Capital: Blend of Russell 2000 Technology, MSCI China Small-Cap Index, MSCI India Small-Cap Index

Aerial view of the Smilow Cancer Hospital, the large building in the left half of the photograph. Founded in 2009 as part of Yale-New Haven Hospital, the state-ofthe-art cancer treatment center, named for philanthropist Joel R. Smilow (b.a. 1954), typifies the expansion and modernization of Yale’s medical campus and of its research and clinical capabilities. 29

Yale Programs

Department of Computer Science and the School of Engineering & Applied Sciences

In March 2015, Yale announced an expansion of the Department of Computer Science, with enhancements in both faculty and classroom resources. The announcement a∞rmed Yale’s commitment to the study of computer science and its desire to claim a leadership position in exploring the frontiers of technical knowledge. It reflected the growing and pervasive role of computer science in higher education and interdisciplinary research, and acknowledged that by enabling a wide range of activities—from creating new smartphone apps to participating in campus hackathons—computer programming skills are an essential part of the college experience. The expansion of the Computer Science faculty was enabled by gifts from two anonymous donors, totaling $20 million. The department is slated to grow from twenty to twenty-six ladder faculty. The first new hires are Mariana Raykova, a specialist in computer security and cryptography, and Mahesh Balakrishnan, an expert in cloud computing and distributed systems. “The growth to twenty-six faculty members that was announced last spring

A fair hosted in 2015 in conjunction with the Yale College “Introduction to Computing and Programming” course (cs50) featured displays of Web apps, mobile apps, and innovations made by

30

is an excellent first step in building the big and great computer science department that a pre-eminent twenty-firstcentury university needs, but it cannot be the last step,” said Joan Feigenbaum, Department Chair and Grace Murray Hopper Professor of Computer Science. “I’m excited to continue advancing this important mission.” A key element in the expansion is the close connection between computer science and engineering. Acknowledging that high level of collaboration, Yale’s Department of Computer Science has joined the University’s four other engineering departments as part of the Yale School of Engineering & Applied Science (seas), a “school within a school” of the Faculty of Arts and Sciences. seas itself has expanded in recent years, with nine new junior faculty hires. The nearly 20% increase in faculty was made possible by a $50 million donation from John C. Malone (b.e. 1963) to endow ten professorships across seas. By becoming part of seas, the Department of Computer Science is positioned at the heart of Yale’s e≠orts to spur innovation and strengthen a culture of interdisciplinary learning. That approach is exemplified at Yale by such facilities and programs as the Center for Engineering Innovation and Design, the Yale Entrepreneurial Institute, Yale’s

students as their final project in the course. On hand were alumni, engineers, and recruiters from eBay, espn, Facebook, Google, and Palantir Technologies.

Institute for Network Science, and the Computing and the Arts program. Yale will invest in a host of new teaching initiatives relating to computer science, many geared to undergraduates. For example, Yale joined forces with Harvard on cs50, an introductory survey course that focuses on basic programming. Both campuses held intensive classroom sessions, with undergraduate learning assistants leading sections, grading problem sets, and fielding student questions. This novel pedagogical experiment marked both the first extensive use of undergraduates in course sta∞ng at Yale and the first large-scale application of a flipped-classroom model across university campuses. Yale will soon begin work on an underground teaching concourse that physically links Arthur K. Watson Hall, home of the Department of Computer Science, with the other main engineering buildings. The 10,000-square-foot space will be designed specifically for undergraduate engineering laboratories and hands-on learning experiences that bolster degree programs o≠ered by the departments of Electrical Engineering, Mechanical Engineering and Materials Science, Biomedical Engineering, and Chemical and Environmental Engineering.

Assistant Professor Mariana Raykova, an expert in computer security and cryptography, is one of the first new faculty brought to Yale as part of the newly funded expansion of the Computer Science department.

Yale Programs (continued)

Entrepreneurship at the Yale School of Management

In April 2014 the Yale School of Management (som) signaled its renewed commitment to entrepreneurship by launching the Entrepreneurship Program. The program expands entrepreneurship initiatives through new curriculum development and strengthening connections across Yale’s entrepreneurship community, while adding an important global dimension through connections with faculty and students in the Global Network for Advanced Management. The program is led by Kyle Jensen, a serial entrepreneur, associate dean, and the inaugural Shanna and Eric Bass ’05 Director of Entrepreneurial Programs.

Student founders meeting in the entrepreneurship suite with som Associate Dean/Director of Entrepreneurship Kyle Jensen. Before joining the Yale som faculty, Jensen co-founded Agrivida, a venture-backed biotechnology company; PriorSmart, a patent analytics provider; and Pit Rho, a leader in motorsport analytics.

An som Entrepreneurship Program study group at work.

In addition, som created two new scholarships for students in each entering m.b.a. class. The merit-based awards will be granted on the basis of demonstrated interest in entrepreneurship and future potential as an entrepreneur. Furthermore, each year som will name up to five Entrepreneurial Fellows who, after graduation, will receive two years of loan deferral to enable them to work full time on a start-up. During the last academic year, the Entrepreneurship Program created eight new classes and a variety of extracurricular programs to support Yale students

interested in entrepreneurship. These range from survey courses like “Entrepreneurship and New Ventures” to “Start-up Founder Practicum,” a course in which students work on their own ventures. som’s growing entrepreneurship curriculum leverages the school’s core curriculum, which emphasizes a team-taught, integrated approach to problem solving to facilitate an understanding of the whole of the enterprise rather than individual functions. This model provides potential entrepreneurs with a deep understanding of how to develop and sustain a venture.

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Yale Programs (continued)

Center for Engineering Innovation and Design

Undergraduates in the new Center for Engineering Innovation and Design (ceid) at Becton Center working with Professor Aaron Dollar on a robotics project.

Yale Institute for Network Science

The Yale Institute for Network Science (yins) produces and disseminates knowledge related to network science, in all its forms and applications, and seeks to make Yale a leader in the area. Network phenomena are now studied in many disciplines, including engineering, computer science, sociology, economics, political science, biology, physics, medicine, public health, and management. yins is home to researchers hailing from di≠erent disciplines and schools across Yale University.

Organizing and making sense of big data (illustrated in the graphic above) has become one of today’s major challenges in machine learning and data mining, and is one of many topics being

32

The Center for Engineering Innovation and Design (ceid), located on the first floor of the Becton Engineering Center, gives students and faculty tools and resources for design projects in an environment that encourages collaboration. It features a lecture area and meeting rooms for the exploration of new ideas, machine shops, a wet lab, and a studio for the creation of physical prototypes. ceid seeks to infuse design experiences into student learning through an array of classes and activities. In addition to hosting engineering design courses, ceid holds workshops, lectures, networking events, and exhibitions. Student teams and clubs can use ceid for meetings and project work.

A∞liated faculty and other researchers share many common technical and scientific challenges, including developing statistical and computational tools for processing big data; creating new models for complex networks; understanding how networks dynamically change in time; investigating techniques for learning and inference in networks; developing methodologies for the design of networks; understanding di≠usion processes in networks; and evaluating emergent behavior, such as how local interactions can lead to global phenomena. yins seeks to expose researchers from across the University to the measurements,

studied by researchers at the Yale Institute for Network Science. yins Assistant Professor Amin Karbasi won a Google Research Award for his research in mathematically extracting a small

ceid’s greatest resources are the people who participate in its activities. Students, both undergraduate and graduate, make up the majority of ceid’s community. They are supported by a network of sta≠, faculty, and external members who serve as mentors, lecturers, speakers, and specialists. While ceid stems from the School of Engineering & Applied Science, scholars from all disciplines are encouraged to use ceid’s resources. ceid empowers students to improve human lives through the advancement of technology. Its approach integrates engineering, innovation, and design while embracing the core values of purpose, diversity, creativity, and integrity.

methodologies, and challenges of diverse disciplines. yins facilitates interdisciplinary research and the development of interdisciplinary courses at both the undergraduate and graduate levels. yins promotes the development and application of network science by organizing seminars, workshops, and conferences, and maintaining a working paper series. Its members advise others in the Yale community who seek to understand networks and network e≠ects.

subset of representative elements to obtain a faithful description of the massive data.

Yale Programs (continued)

Computing and the Arts

Computing and the Arts is an interdepartmental major designed for students who wish to integrate work in computing with work in one of the arts disciplines: art, history of art, music, or theater.

This tablet is a student’s rendering of the multiplication table by 5’s. Here it is going for a 360 degree spin to get scanned for its 3d model with a NextEngine scanner.

Center for Biomedical and Interventional Technology

The Yale University Center for Biomedical and Interventional Technology (cbit) is an interdisciplinary initiative with the mission of catalyzing biomedical technology development and commercialization at Yale. Formally established in 2014, cbit leverages Yale’s students, faculty, and staff, Yale’s resources across campus, the Yale-New Haven Health System, peer institutions,

During a cbit presentation to science, engineering, art, business, and medical students, Dr. Andrey Zinchuk pitched recruits for his project to develop a device for sleep apnea patients.

For students with a computing perspective, issues in these disciplines present interesting and substantive problems: the use of computers by musicians to compose; the limitations of current software tools used by artists; the types of analyses done by art historians; the challenges in designing and using virtual

Yale’s Babylonian clay tablet of a portion of the epic of Gilgamesh, scanned as part of a program in Computing and the Arts at Yale. Because the tablets contain writing on all sides, they needed to be propped up by cushions so that the full text could be recorded.

and industry partners to identify, support, and fund transformative biomedical technologies that drive better patient care. Additionally, cbit inspires a culture of biomedical innovation in the broader community through events and activities such as Healthcare Hackathons,

Senior-level engineers and managers gowned up for a cbit Clinical Immersion Program for industry,

sets in the theater; the ways that virtual worlds might help to envision new forms of artistic expression; and the lessons that can be learned from trying to create a robotic conductor or performer. For students with an artistic perspective, computing methods o≠er a systematic approach to achieving their vision. A foundation in computer science allows artists to understand existing computing tools more comprehensively and to use them more e≠ectively. Furthermore, it gives artists insight into what currently can and cannot be done with computers, so they can anticipate the future development of new tools for computing in their field.

Clinician Pitch Nights, medical device entrepreneurship workshops and lectures, biomedical innovation course work, direct project mentorship, and a Clinical Immersion Program for industry.

which included a tour of the Yale-New Haven Hospital surgical and central sterilization units.

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Management and Since 1975, the Yale Corporation Investment Committee has been responOversight sible for oversight of the Endowment, incorporating senior-level investment experience into portfolio policy formulation. The Investment 6 Committee consists of at least three Fellows of the Corporation and other persons who have particular investment expertise. The Committee meets quarterly, at which time members review asset allocation policies, Endowment performance, and strategies proposed by Investments O∞ce sta≠. The Committee approves guidelines for investment of the Endowment portfolio, specifying investment objectives, spending policy, and approaches for the investment of each asset category.

Investment Committee Douglas A. Warner, iii ’68 Kevin P. Ryan ’85 Members Chairman Chairman and Founder Former Chairman Gilt, Mongodb, Business Insider, Zola J.P. Morgan Chase & Co. Peter Salovey ’86 ph.d. Francis Biondi ’87 President Managing Member Yale University King Street Capital Management John R. Shrewsberry ’92 mppm Ben Inker ’92 Chief Financial O∞cer Partner Wells Fargo & Company gmo Carter Simonds ’99 Paul L. Joskow ’72 ph.d. Managing Director President Blue Ridge Capital Alfred P. Sloan Foundation Dinakar Singh ’90 Ann Miura-Ko ’98 ceo and Founding Partner Partner tpg-Axon Capital Floodgate

Aerial view of the central Yale campus, with Harkness Tower at center right. 34

The Investments O∞ce manages the Endowment and other University financial assets, and defines and implements the University’s borrowing strategies. Headed by the Chief Investment O∞cer, the O∞ce currently consists of thirty-one professionals.

Investments O∞ce David F. Swensen ’80 ph.d., ’14 l.h.d. Patrick K. Sherwood ’13 m.b.a. Chief Investment O∞cer Associate Director Dean J. Takahashi ’80, ’83 mppm Cain P. Solto≠ ’08 Senior Director Associate Director Carrie A. Abildgaard Xinchen Wang ’09 Director Associate Director Alexander C. Banker Celeste P. Benson Director Senior Portfolio Manager Alan S. Forman Michael Knight Director Senior Business Analyst R. Alexander Hetherington ’06 David S. Katzman ’10 Director Senior Associate Lisa M. Howie ’00, ’08 m.b.a. Philip J. Bronstein ’12 Director Senior Investment Analyst Matthew S. T. Mendelsohn ’07 Amy M. Chivetta Director Senior Investment Analyst Timothy R. Sullivan ’86 Timothy H. Hillas ’13 Director Senior Investment Analyst Kenneth R. Miller ’71 Daniel J. Otto ’12 Senior Associate General Counsel Senior Investment Analyst Stephanie S. Chan ’97 E. Benjamin VanGelder ’13 Associate General Counsel Senior Investment Analyst Deborah S. Chung Laura W. Bass ’15 Associate General Counsel Investment Analyst Sohail S. Ramirez ’10 j.d. Sophia B. Jia ’14 Associate General Counsel Investment Analyst J. Colin Sullivan Robert J. Pecoraro ’15 Associate General Counsel Investment Analyst Michael E. Finnerty John T. Ryan ’14 Associate Director Investment Analyst John V. Ricotta ’08 Associate Director

35

Aerial view of the Schwarzman Center Rotunda, part of the Yale Bicentennial Buildings of 1901. 36

The Daniel L. Malone Engineering Center, opened in medical Engineering, which partners faculty from Yale architect Cesar Pelli, the building is a gift from John 2005 to house the newly formed Department of Bio- Engineering and the School of Medicine. Designed by C. Malone (b.e. 1963) in memory of his father.

Sources

Financial and Investment Information Whitney and Betty MacMillan Center for Photo Credits International and Area Studies at Yale Educational institution asset allocations and returns Portraits of alumni, pp. 8–12, 17– 20, were provided by from Cambridge Associates. Yale College Programs of Study the individuals shown. David Singer photo provided by Maverick Capital Ventures. Much of the material in this publication is drawn from Yale Entrepreneurial Institute memoranda produced by the Investments Office for Corporate logos courtesy of the companies: Achillion the Yale Corporation Investment Committee. Other Yale University Center for Biomedical and and Oasys Water, p. 25; LinkedIn, p. 5. material comes from Yale’s financial records, Reports of Interventional Technology Yale professional schools, departments, and organizathe Treasurer, and Reports of the President. Yale University Center for Engineering Innovation tions (as listed under “Sources”) graciously provided Texts on Yale Alumni Venture Capitalists, and Design the photographs of their activities shown throughout. Entrepreneurs, Entrepreneurial Organizations, Yale University Department of Computer Science Other photo credits: Manuscripts and Archives, and Yale Programs Yale University Library: p. 21; Simon & Schuster, Yale University Institute for Network Science Much of the material in this publication is drawn from Publishers: book cover, p. 3; Wikipedia: p. 5 top. interviews with Yale alumni venture capitalists and Yale University Office of Cooperative Research entrepreneurs and from biographical information Additional photographs, including front and back provided by the subjects. Yale University Office of Public Affairs and covers: Michael Marsland, Yale Office of Public Affairs Communications and Communications. Connecticut Innovations Yale University School of Engineering & Design Elm Street Ventures Applied Science Strong Cohen llc/L. Feher

Platoff, Emma and Stephanie Rogers, “SEAS Receives Yale University School of Management $20 Million Donation,” Yale Daily News 26 March 2015 Back cover photo: View of Science Hill, with Kroon Hall Program in Innovative Therapeutics for and Kline Biology Tower. Connecticut’s Health