At the recent passing of David Swensen, the deservedly famous head of the Yale Endowment, many commented on how revolutionary and successful his ideas have been in raising institutional investing to a whole new level. Swensen, effectively the father of what has become known as the “Endowment Model,” pioneered the broad expansion into new asset classes, creating an impressive return history. Although we too admire Swensen for his investment brilliance, we also admire him for a couple of ways in which he exhibited his extraordinary integrity as a human being.
First, Swensen dedicated his professional life to an educational institution rather than a for-profit entity. Though he was the most highly compensated employee of Yale University, he clearly could have earned hundreds of times more in compensation had he opted to go into business for himself. He spoke eloquently, though, of the calling of working for a university, and his choice to remain at Yale despite his opportunity cost exemplified selfless dedication to something bigger than himself.
Second, many people don’t focus as much on Swensen’s role in helping individuals understand the complexity of finance, warning about the hidden risks of exotic investments, criticizing excessive fees, and highlighting the cost of ignoring the tax consequences for taxable investors, even though he managed an exempt portfolio. We appreciate his comment on the impact of taxes from his book Unconventional Success: “In an industry guilty of many crimes against investors, ignoring the tax consequences of portfolio transactions ranks among the most grievous.” Though he earned impressive returns in alternative asset classes, in the book, Swensen still expressed his disdain for the blustering swagger that often accompanies the pursuit of excess return: “Trendy investors often pursue the cocktail-party-chatter benefits of commitments to the promise, seldom fulfilled, of actively managed alternatives. Sensible investors avoid the non-core asset classes.”
Thus, while the industry lost one of its most successful investors, humanity also lost one of its most honorable exemplars of ethical behavior.
This material is provided for informational purposes only and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are subject to change at any time without notice. References to specific securities, asset classes and financial markets are for illustrative purposes only and are not intended to be and should not be interpreted as recommendations.
This material may contain “forward-looking” information that is not purely historical in nature. Such information may include, among other things, projections, forecasts, estimates of yields or returns, and proposed or expected portfolio composition. Moreover, any historical performance information of other investment vehicles or composite accounts managed by BlackRock, Inc. and/or its subsidiaries (together, “BlackRock”) included in this material is presented by way of example only. No representation is made that any performance presented will be achieved, or that every assumption made in achieving, calculating or presenting either the forward-looking information or the historical performance information herein has been considered or stated in preparing this material. Any changes to assumptions that may have been made in preparing this material could have a material impact on the investment returns that are presented herein by way of example. Past performance is no guarantee of future results.
The information and opinions contained in this material are derived from proprietary and nonproprietary sources deemed by BlackRock to be reliable, are not necessarily all-inclusive and are not guaranteed as to accuracy.
Aperio is providing this link to a third-party website that displays a research report, article, webcast, video, or other content that we believe may be informational or educational for you. This linked content is presented by a source that we believe to be reliable, but we do not guarantee its accuracy or completeness, including any associated disclosures. Aperio has no control over the nature of the content on, or the availability of, this third-party website.
The inclusion of this link on our website also does not imply a recommendation or endorsement of any views expressed in such linked content and should not be considered: investment, tax, or legal advice; a solicitation; a recommendation of Aperio or any third-party’s services; or an offer to buy or sell any securities or related financial instruments in any jurisdiction.
Your subscription to the Aperio Blog has been confirmed. You will receive an email notification when a new blog is posted.
Your password is now updated.
Thank you for setting the security questions for your account.
User Must Be Logged In
You must be logged in to perform this action.
Invalid token. Please reload the page and try this action again.
You Currently Do Not Have Portal Access
You do not have access to the Aperio Client Portal.
Please note that if you just registered, it may take up to 24 hours after your registration form has been approved before you are able to log in.
That answer does not match our records. Note that responses to security questions are case sensitive. Please try again or contact Aperio at operations@aperiogroup.com or 415.339.4590.
Your portal user profile does not have provide access to this page. Please contact your administrator if you believe you have receieved this message in error.
Please select a request type.
Your account is temporarily locked because you repeatedly entered wrong answers to security question. Please try again in an hour.
There was an error sending the email to your new user. Please try again.
There was an error sending your email. Please try again.
There was an error sending the email to reset your password. Please try again.
There was an error sending the verification email for your portal account. Please press “Send Verification Email” to retry.
There was an error sending your Contact Us form to Aperio. Please try again.
Would you like to set up Multi-Factor Authentication (MFA) for your account? If yes, click here. If not, you are able to enable MFA for your account at anytime in your Profile by clicking Edit Profile.
With Multi-Factor Authentication (MFA), an extra layer of security is added to your account to prevent unauthorized users from logging in, even if they have your password. This extra security measure requires you to verify your identity using a randomized code we will send you each time you attempt to log in. MFA reduces the risk of unauthorized requests from your Aperio Client Portal account and provides extra security for your data.
You can choose to receive your security code through one of three ways: by text message/SMS, voice call, or the Okta Verify app. Through Aperio’s partnership with Okta, you can access their free Verify app to receive your MFA token on your Apple or Android device.
Are you sure you want to remove this factor from your account?
The factor has been successfully removed from your account.
You are enrolled in SMS MFA.
You are not enrolled in Text/SMS MFA. To learn how to enroll, click here.
To enroll in SMS MFA, please enter your mobile phone number.
Enter the code received on your mobile phone below.
You have successfully enrolled in SMS MFA.
This phone number was previously set up for SMS MFA for this account. The number and your portal account are now re-enrolled in SMS MFA. If this is incorrect, please contact Aperio at 415.339.4590.
You are enrolled in Voice Call MFA.
You are not enrolled in Voice MFA. To learn how to enroll, click here.
To enroll in Voice MFA, please enter your number and extension if applicable.
Enter the code from the automated voice call you just received.
You have successfully enrolled in Voice MFA.
You are enrolled in Okta Verify MFA.
You are not enrolled in Okta Verify MFA. To learn more on Okta Verify MFA, visit the Okta Verify enrollment guide here.
Please ensure you have downloaded the Okta Verify App prior to clicking Enroll.
After opening the Okta Verify App on your mobile device, press Add Account and scan the QR code shown on the screen. Enter the code shown in the app in the box below.
You have successfully enrolled in Okta Verify MFA.
Confirm Subscription
Patrick Geddes
Senior Advisor and Chief Tax Economist
What are your key responsibilities? I analyze cash flows for complicated tax situations facing our clients and their tax advisors, including charitable donations, incentive options, and estate/gift tax scenarios.
Describe your key previous work experience. Prior to co-founding Aperio, I was the Research Director and CFO at Morningstar. I also taught graduate-level portfolio theory, which has proven quite applicable to constructing client portfolios at Aperio. Likewise, I’ve applied learnings from building complex, risk-adjusted after-tax cash flow models at an oil company to my work here, doing the same thing for taxable investors.
What is the most interesting aspect of the job to you? As I try to help taxable investors understand how their pre-tax returns aren’t relevant, I continuously observe how resistant the investment industry remains to focusing on after-tax returns. It’s fascinating how much the industry’s stance reflects financial incentives—particularly from the lucrative revenue streams of the least tax-efficient strategies. More generally, the challenge of complicated investment problems continues to stimulate and satisfy my intellectual curiosity.
Describe some noteworthy projects you have worked on that directly impact Aperio’s clients. I’ve been closely involved in a wide range of new strategies and portfolio features, and often meet with many of our clients. I’ve particularly enjoyed balancing how to operate a for-profit business while emphasizing the fair treatment of clients and providing an exacting level of transparency and honesty, including taking full ownership when we make mistakes.
What do you like most about working at Aperio? It’s an incredible honor to work with such smart people who take pride in doing the right thing.
What previous role(s) did you serve at Aperio? Before assuming the roles of CEO and Chief Tax Economist in 2014, I was Aperio’s Chief Investment Officer for 15 years.
What are some non-work-related things we should know about you? I love to cook, which proves gratifying since I spend so much of my work time in my head and cooking is such a physical experience, especially the olfactory delights of spices. My other interests include reading, bicycling, hiking, and listening to Renaissance/early baroque music.
What postsecondary degrees and/or professional certifications do you possess? BA in History from Yale University; MBA in Finance from the University of Chicago.
At the recent passing of David Swensen, the deservedly famous head of the Yale Endowment, many commented on how revolutionary and successful his ideas have been in raising institutional investing to a whole new level...
In the past 18 months, we’ve witnessed some extraordinary changes in how retail stock investors trade, from the broad shift for many brokerage firms toward zero commissions to the jump in trading by individuals in 2020, presumably a result of the pandemic...
In June, we posted our “Statement on Racism” and said that we were developing plans on what Aperio could do to help move toward racial justice. Through these blogs, we’re sharing our journey...
"Restoring Value to Minimum Variance" – Journal of Investment Management, Second Quarter 2014 (received a Harry M. Markowitz Special Distinction Award)
"The Pursuit of After-Tax Returns: Indexed Exchange-Traded Funds vs. Indexed Separately Managed Accounts" – Investments & Wealth Monitor, September/October 2011