David Fuller's view 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 Tam, 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.

That is partly down to the numbers. In the year to June 2009, the value of the assets held in the Harvard and Yale endowment funds fell by over 25 per cent. Meanwhile, across all US colleges, the average loss was 23 per cent (a pattern similar to the GIC, which saw losses of 20 per cent in the year to March 2009).

Supporters of the Harvard approach insist that these declines are likely to be partly reversed in the coming years. Moreover, precisely because the losses were so widespread, some investment managers are apt to shrug them off, as a force of nature.

But the fact is that not everybody suffered quite the same way; at the Oxford University endowment fund, for example, losses in the year to June 2009 were "only" 10 per cent. And that, according to Sandra Robertson, head of this fund, is because Oxford deliberately decided a few years ago that it would not try to emulate Harvard.