AI does my Endowment and Canadian investment model case study

This case study presents a debate between Edward, advocating for the Yale endowment model and significant private equity investment, and Hatter, defending Queen’s College, Oxford’s successful, low-cost, largely passive approach. The discussion highlights contrasting investment philosophies, analysing the performance and risks of various strategies including private equity, hedge funds, and direct investing. A key point of contention is the illiquidity premium, with Edward arguing that patient capital earns extra returns in illiquid markets, while Hatter counters that this premium is competed away due to high demand. The Canadian pension fund model, focusing on factor investing and a reference portfolio, is introduced as a potential alternative, prompting further discussion about optimal compensation structures, accountability, and risk management. Ultimately, the text explores the complexities of endowment management, contrasting the potential benefits and drawbacks of different approaches, and questioning whether imitating successful models always yields superior results.