We’ve attached a hot-off-the-presses case study by Ludovic Phalippou of Oxford’s business school. Unlike many in academia, Phalippou is willing and able to inject humor into his teaching.
His case study is in the form of a discussion among Oxford dons of various prevailing models for investing which in their view, have been treated with far too much reverence. From the overview:
This case study discusses the different approaches to asset allocation and some of the key issues that asset owners currently face. It covers the Yale model, the Canadian model, and more traditional approaches. The case is set up as a debate with a dense content; about the equivalent of three traditional case studies. Speakers give their best arguments in a concise and impactful manner. Each proposal and data point gets immediately and effectively criticized. Each side of each argument is exposed and boiled down to its essence. Although fictitious the dialogue is close to what is said behind closed door in practice. The author experienced these discussions first-hand and took an active part in them. Finally, the overall discussion style should keep the reader engaged and amused.
This piece does a fine job of presenting the differences between the “Yale model,” which is the model used by some universities but Yale has been the most successful, hence aspirants look to Yale as exemplar (amusingly, before Harvard started having performance issues, Harvard was more often cited as the one to imitate). The second is the so-called Canadian model used by the Canada Pension Plan Investment Board. It differs markedly from Yale, with its biggest point of differentiation being that it rejects the idea of asset classes and instead relies on factors….which sound an awful lot like asset classes, just really broad ones. From the paper:
Small wonder all these pension funds and endowments want to go Canadian. I tell you what is new here: we now have compensation packages dressed up as professional investment models.
If you are at all finance literate, you’ll both enjoy this paper and find it informative.