Mark Yusko is the Founder, CEO, and CIO of Morgan Creek Capital Management. Yusko has forged a substantial fortune by providing financial advice for pension funds, endowments, and private clients interested in building their wealth. To do so, he has used strategies as varied as the public and private markets in which he makes his financial moves, including the use of the Endowment Model of investing.
Education and Early Career
Mark Yusko graduated from Notre Dame in 1985 with a B.S. in biology and chemistry. He followed that up with an MBA in accounting and finance from the University of Chicago before getting into the finance industry.
In 1993, Yusko joined the Investment Office of one his alma mater, Notre Dame, as an assistant investor officer. He earned his stripes under the CIO to learn all the facets necessary for successfully managing a major endowment, such as how to efficiently and effectively allocate resources and dealing with volatility. He stayed at the university’s Investment Office for five years, rising through the ranks to become its Sr. Investment Director before leaving in 1998 for another position in endowment at the University of North Carolina.
While at UNC, Yusko founded the university’s endowment investment office, the UNC Management Company. Under his guidance, UNC’s endowment grew to $1.5 billion in total assets by following Yusko’s consistently successful advice on investments in a variety of markets.
When Yusko arrived at UNC, nearly all of its endowment money was tied up in stocks and bonds. However, through the use of his strategies, analysis, and bold moves, the University’s Investment Fund Board moved over 75% of its money into hedge funds and private equities. It also managed its spending better, streamlined and improved the performance of its investment managers, and implemented performance reporting and analysis for its managers. The payoff was the spectacular growth of the endowment.
In 2004, Mark Yusko took his decade-long experience and success in learning about and building university endowments to form his own firm, Morgan Creek Capital Management. Yusko’s flagship fund while at Morgan Creek was The Endowment Fund, which he wanted to use as a model of endowment building that other investors could follow and profit from.
The Endowment Fund immediately made a splash, as it became among the first hedge funds to register with the SEC as a structured Registered Investment Company, which allowed Morgan Creek to have a virtually unlimited number of investors; for this reason, it had over 20,000 investors at its peak.
The Endowment Fund made further headlines when it grew despite the 2008-09 financial crisis, soaring over 40% in returns. After that, however, until Yusko stepped down from the fund in 2013, it lost its shine, as it posted lower gains and even some losses during that time. Critics charged that the sectors that the fund had invested in – such as real estate and energy – were part of the problem because if a downturn started, investors couldn’t quickly pull their funds to exit, as could be done with investments in other industries. It was also thought that those industries had more volatility than investors liked.
Undaunted, upon leaving The Endowment Fund, Yusko started another mutual fund, the Morgan Creek Tactical Allocation Fund, aimed at attracting retail investors. Its main focus was on less risky, less volatile investments, although Yusko’s investment methods and strategies have remained basically unchanged.
When Harvard’s endowment dropped by nearly a third in 2009, the Endowment Model came under sharp criticism, yet Yusko remains a practitioner of its tenets. He believed that Harvard’s lack of performance was not reflective of the model itself but instead of the tenuous nature of the market. For long-term investors, he is convinced the model remains the most viable way to grow wealth in this sector.
Mark Yusko has earned a well-deserved reputation for philanthropy, as well. The Morgan Creek Foundation is one of his most widely known endeavors, founded with the purpose of awarding academic and community-focused grants to various non-profit organizations. It receives a portion of its proceeds each year from Morgan Creek Capital Management.
Yusko and his wife Stacey also founded a program, The Hesburgh-Yusko Scholars Program, which awards four-year scholarships to students attending Notre Dame. The $35 million that Mark and Stacey gave to start the program was one of the largest gifts in the school’s history.