The doughty Government Investment Corporation of Singapore is not often a hotbed of heretical thought. Recently, however, a debate has been bubbling at the GIC that has fascinating implications for investors around the world.

The issue at stake revolves around the so-called Harvard or Yale investment model. During most of its recent history, the GIC – like many other sovereign wealth funds around the world – has looked at these huge university endowment funds with envy and admiration. For the Harvard or Yale model seemed to offer an exciting vision for any long-term investment group that wanted to do more than act like a stodgy, old-fashioned pension fund. After all, for 20 years, groups such as Yale earned solid returns, by pioneering a distinctive investment style. This essentially championed the idea of diversifying into illiquid and alternative asset classes, such as private equity, alongside mainstream securities.

But these days, the names of Harvard and Yale – like so many American financial brands – are looking somewhat tarnished in places such as Asia. Or as Tony Tan, deputy chairman of the GIC, explains: “The whole idea of the endowment model has been very influential [before]. But any reasonable investor would [now] want to take another look at this.” Or, more specifically, about whether to copy it.