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

Q&A: Schroders’ Forest Discusses Multi-Asset Investments On Eve Of U.S. Launch

Jul 17 2014 | 8:05am ET

Global investment manager Schroders has $446 billion in assets under management, $...

Lifestyle

Einhorns Busts At WSOP, Finishes In 173rd

Jul 15 2014 | 10:48am ET

Greenlight Capital founder David Einhorn’s World Series of Poker won’t end at...

Guest Contributor

Common Risk Parity Misperceptions

Jul 16 2014 | 11:02am ET

Over the past few years, risk parity has become a component of most investors’...

 

Sponsored Content

    Northern Trust Helps Hedge Funds Navigate Derivatives Regulations

    Jul 8 2014 | 10:48am ET

    The surge in derivatives regulation is among the most complex challenges facing the financial services industry today. Northern Trust’s Joshua Satten recently spoke with FINalternatives to share insights into the challenges presented by new regulation and explore how the industry is responding. Read more…

Publisher's Note