Taxing The Yale Model

The success of the Yale Endowment has been highly publicized, leading many endowments, foundations and more recently, even high net worth individuals, to consider adopting the so-called Yale Model.

The Yale Model includes a focus on alternative investments and attempts to capture the liquidity premium available in illiquid investments (such as private equity). In addition to heavy exposure to private equity, the strategy frequently includes investments in hedge funds, many of which also invest in strategies that try to exploit the liquidity premium. And in general, hedge funds themselves are illiquid investments.

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