Nobel Foundation To Boost Hedge Funds

Dec 4 2012 | 11:46am ET

Future generations may have hedge funds to thank for the survival of the Nobel Prizes.

The Nobel Foundation plans to increase its investments in hedge funds in an effort to increase its returns. Investment losses of 18% over the last five years forced the foundation to cut the cash award attached to the prize by 20%, to 8 million Swedish kronor (US$1.2 million).

"When we look at the analysis we see that we can get more return with less risks by doing that," executive director Lars Heikensten told Bloomberg News. "If we can choose hedge funds that we trust, then we can get better returns for given risks."

Heikensten said the Nobel Foundation required a 3.5% to 4% return on its US$450 million endowment to maintain its capital base. It's instead earned just 1.5% to 2% over the past decade, and "had in fact been spending more every year on average than" it had earned.

The Nobel Foundation currently has 24% of its money invested in hedge funds and private equity funds, up from 6% five years ago.

Among the new managers entrusted with Alfred Nobel's bequest are Nektar Asset Management's Kent Janer and Rational Asset Management's Sven Nyman, both of Sweden.


In Depth

Steinbrugge: Top 10 Hedge Fund Industry Trends for 2017

Jan 3 2017 | 9:03pm ET

Each year, Agecroft Partners' Don Steinbrugge predicts the top hedge fund industry...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

DarcMatter: The Top Trends in Alternative Investments for 2017

Jan 13 2017 | 8:22pm ET

The $7 trillion alternative investments industry is poised for continued growth...

 

From the current issue of

Securities and Exchange Commission Chair Mary Jo White will step down as chair of the nation’s Wall Street overseer in January, setting the stage for a potential conservative shift in the regulator’s leadership under the incoming Donald Trump administration.