David Swensen graduated from the University of Wisconsin-River Falls in 1975. He then attended Yale University, where he wrote his dissertation "A Model for the Valuation of Corporate Bonds".

He joined Salomon Brothers in 1980 as an associate in corporate finance, where he contributed to establishing the first currency swap agreement between IBM and the World Bank.

After his tenure at Salomon Brothers, he joined Lehman Brothers as Senior Vice President. During his 3 years at the bank, he played a key role in the engineering of the first currency swaps. In 1985, he was recruited by Yale to become the manager of the university's endowment fund.

In 1986, Dean Takashi joined him, and together they laid the foundations for Swensen’s management model. When he took over management of the fund in 1985, it was valued at 1.3 billion dollars. By the time of his death in May 2021, the fund had grown to over 42.3 billion dollars (compared to a performance of 20 billion dollars for an ETF fully invested in the S&P500 over the same period), with an annualized return of 13.7% over 36 years.