No Prize For Hedge Funds' Management Of Nobel Money

Oct 17 2013 | 1:56pm ET

Hedge funds are proving insufficient to keep the Nobel Prizes sufficiently rich.

The Nobel Foundation last year announced plans to boost its already-substantial allocation to hedge funds. But with hedge funds underperforming the broader markets again this year, the organization said it may seek charitable contributions to boost its endowment.

In 2012, the foundation slashed the value of a Nobel by 20%, the first reduction since 1949, but would like to return it to its previous level. And while executive director Lars Heikensten told Bloomberg News that the organization "should over course continue to try to improve our asset management, but I'm not sure that will be enough."

"There is a long-term problem if we want to raise the ambition level, which I'd like to see us do," Heikensten said. "It'll be difficult to save more and it will also be difficult to maintain costs at the current level. This indicates there will be a need for more money over time."

Some 94% of the Nobel Foundation's capital is from Alfred Nobel's original gift in 1896.


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