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Yale SOM launches new asset management program

Tuesday, June 25, 2019
Opalesque Industry Update - The Yale School of Management will launch a new degree program in asset management that will give students just starting their careers rich exposure to the application of data science and quantitative techniques to investment decisions. Taught by leading Yale SOM faculty, alongside the Yale Investments Office and other renowned investment managers, the course of study will emphasize the goals of investment management, including fiduciary responsibility and ethics, as well as investment performance. The one-year program, leading to a Master of Management Studies degree, is aimed at students straight out of college or with less than three years of work experience. The first class will enter in the fall of 2020.

Tobias J. Moskowitz, the Dean Takahashi '80 B.A., '83 M.P.P.M. Professor of Finance at Yale SOM, led the development of the program and will serve as faculty director. He said, "The investment industry is fast-changing, with new techniques and new technologies constantly altering the playing field. It's exciting to know we'll be giving our students a glimpse into the latest scholarship and practice, as well as a grounding in the fundamentals. One goal we have is to train the future generations of investment managers 'the right way' by not only teaching the state-of-the-art techniques, but also conveying to them the importance of fiduciary responsibility and ethical investment practices."

Over one academic year (August through May), students will attend classes from Thursday evening through Saturday each week. They will receive training in all aspects of asset management, including investment theory, factor investing, and risk management, with a core focus on forward-looking quantitative methods and new technologies emerging in the fast-developing field. Courses will be rigorous and quantitative in nature, similar to the level of a PhD finance course, but with a strong orientation toward practical application and innovation in the asset management industry. The flexible format will enable students to build practical experience by continuing to work in the industry, or to pursue an area of interest by taking additional courses at Yale SOM or developing a research project under faculty supervision.

Edward A. Snyder, the Indra K. Nooyi Dean and William S. Beinecke Professor of Economics and Management, said that the new program will extend the reach of the school's mission. "This program will leverage the expertise of our superb finance faculty and our deep connections with asset managers. The rigorous curriculum will prepare future asset managers to perform at the highest level and to achieve positive impacts for business and society."

The Master's Degree in Asset Management will further strengthen Yale SOM programs related to finance and investments, and benefit from the critical mass of student, faculty, and alumni interest in the field. Students will have access to resources, such as professional clubs and career development programs, that have been developed in the other degree programs, such as the full-time MBA and the Master of Advanced Management. In addition, the school offers an asset management area of focus in the MBA for Executives program, which draws mid-career professionals who complete the MBA integrated curriculum and further their leadership capabilities over a two-year course of study. Classes and lectures developed for the Asset Management program will also be valuable to students in other SOM degree programs.

The new degree program is being developed in close collaboration with the Yale Investments Office (YIO), a pathbreaking team of investors who pioneered the "Yale Model" and have outpaced all other major endowments over the last 30 years. Both David Swensen, Yale's chief investment officer, and Dean Takahashi '83, the senior director of YIO, will teach in the program, and students will benefit from their experience combining quantitative and qualitative considerations in investment decision-making. In addition to its unparalleled performance, YIO is recognized for developing many of the leaders in the field. The heads or founders of Princeton University Investment Company, Hillhouse Capital, and the University of Pennsylvania Office of Investments all worked with Swensen after graduating from the Yale School of Management.

David Swensen said he looks forward to engaging with students in the new Yale SOM program. "Toby and I look forward to introducing our students to the endlessly fascinating world of asset management. Investment success requires constant learning, beginning in the classroom and continuing day-to-day throughout a career. Yale's program in asset management will provide students with a solid foundation upon which they can build a productive and ethical professional life."

Paula Volent '97 currently heads the Bowdoin College Endowment. After graduating from Yale SOM, she spent three years at the YIO. "As global markets continue to become more complicated-and fascinating-Yale occupies a solid position as a thought leader at the crossroads of the investment world. Yale faculty produce seminal research and ideas that further the understanding of markets on many fronts. Yale provides the unique opportunity to learn from the creators of the influential Yale Model as well as connect with Yale alumni working in every facet of the industry. It's the perfect place to start a meaningful career in asset management."

The Yale SOM finance faculty includes experts in asset pricing, investment theory, behavioral finance, hedge funds, and big data/machine learning techniques, among many other subjects. The curriculum will leverage this expertise, along with the experiences of professional asset managers, to cover the breadth of the investment field, including quantitative investment models, traditional approaches, and alternative investing. A broad range of markets and asset classes will be explored, including traditional equity and bond markets, as well as absolute return strategies, currencies, commodities, derivative securities, credit, and illiquid alternative asset classes such as private equity, real estate, and natural resources. Many courses in the asset management program will be co-taught by a finance faculty member and a practicing investor, whether from the YIO or one of the partner firms located in the region from New York City to Fairfield County, Connecticut, to Boston, Massachusetts.

Andrea Frazzini, Principal and Co-Head of the Global Stock Selection Team at AQR Capital Management and a graduate of the Yale University PhD program, commented, "In our industry, we are constantly looking for bright people who have rigorous quantitative training plus an understanding of how theories and conceptual tools can be applied to markets. The Yale finance faculty are at the forefront of research in asset valuation and market dynamics, and they maintain close relationships with investors, providing students of the Yale Master's in Asset Management with exceptional instruction on both sides of that equation. By co-teaching many classes with practitioners, they strengthen the bridge between theory and practice-an ideal environment in which to start a career in asset management."

The program is intended for students graduating from college or with less than three years of work experience who want to understand the application of data, statistical, mathematical, and economic frameworks in the investment industry. Yale SOM seeks to encourage students from underrepresented backgrounds to enter the asset management industry and will provide scholarships and fellowships to that end.

The Master's Degree in Asset Management program will prepare students for jobs on the buy-side or the sell-side, with skills that are highly valued by employers. It will also imbue them with a rigorous, analytical approach to decision-making and with Yale's mission-based approach to building a purposeful career.

Osman Nalbantoglu, Co-Head of Investment Engine at Bridgewater Associates, said, "The Master's in Asset Management program is a natural extension of Yale SOM's investment and finance offerings. Their world class faculty has collaborated with accomplished alumni in the field to develop a highly tailored yet extensive curriculum in order to provide students with a thorough understanding of the asset management industry. As an alumnus of Yale and a practitioner in the field, I'm thrilled to see the SOM continue to stay on the cutting edge of academic offerings."

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