The Nobel Foundation will hand over 1.4 billion won in prize money to Han Kang. How will the prize money be financed? [금융팀의 뱅크워치]｜Dong-A Ilbo

Interest in the prize money is growing as novelist Han Kang (54) became the first Korean writer to win the Nobel Prize in Literature. Han Kang will receive 11 million kronor (about 1.43 billion won) in prize money for this year’s Nobel Prize.

Where do the resources for the Nobel Prize money come from? The foundation was the private fortune of Alfred Nobel, who developed dynamite and became a wealthy man. Nobel provided 31 million kronor when establishing the Nobel Prize in 1895, and as of the end of last year, the size of investment assets had grown to a whopping 6.233 billion kronor. It has steadily increased its assets over a period of nearly 130 years and has established itself as a ‘large hand’ worth over 800 billion won in Korean won.

In his will, Nobel wrote, “Convert assets exceeding 31 million krona into a fund and invest in safe securities,” and “Distribute the profits from the investment in the form of a prize to a person who has contributed greatly to humanity during the year.” In fact, reflecting the founder’s intention, the Nobel Foundation still prefers indirect investment through financial products such as funds instead of direct investment.

Novelist Han Kang, who won the Nobel Prize in Literature, is giving his acceptance speech at the ‘2024 Pony Chung Innovation Award’ ceremony held at Pony Chung Hall in Samseong-dong, Gangnam-gu, Seoul on the 17th of this month. Joint photo reporting group

According to the annual report published by the Nobel Foundation, about 52% of total investment assets (KRW 6.233 billion) last year were held in stock funds. It has a much higher proportion compared to other assets, such as alternative investments (22%), bonds (17%), and real estate and infrastructure funds (9%). Investment regions are diverse, including not only Sweden but also other European regions, the United States, and emerging countries.

The Nobel Foundation has a reputation for aggressive investment among institutional investors around the world, including sovereign wealth funds and pension funds. In the beginning, the Nobel Foundation focused on highly safe bonds according to the founder’s wishes, but then expanded its investment scope to include stocks and real estate. This is because there were often situations where the Nobel Prize prize money had to be reduced due to poor returns.

In particular, it was around 2006, 18 years ago, that the Nobel Foundation attracted attention in the financial market. At the time, the Nobel Foundation entrusted part of the fund to three hedge funds, including Corbin Capital Partners in the United States. Among funds that manage a lot of money, it is unusual to entrust the funds to a hedge fund. A high-ranking official from a domestic pension fund explained, “Contrary to their external image, the Nobel Foundation and the Vatican are known as institutions that invest aggressively,” and “They tend to actively engage in alternative investments to prevent a decline in returns.”

Nobel Foundation’s asset allocation status over the past five years. Compared to major pension funds and sovereign wealth funds, the proportion of alternative investments such as hedge funds, real estate, and infrastructure funds is high. We are investing aggressively to achieve that high rate of return. Nobel Foundation Annual Report

Kang Woo-seok, economics reporter

The generous prize money of Nobel Prize winners comes from the profits of the fund that the foundation operates in this way for a year. According to the foundation’s rules, 67.5% of the profits are used as prize money, but the prize money amount may vary depending on the rate of return. In fact, the prize money that writer Han Kang will receive (11 million kronor) is 1 million kronor more than the winner of the previous year. It is also different from the prize money (10,787,402 kronor) that former President Kim Dae-jung received when he won the Nobel Peace Prize in 2000.

It is said that the Nobel Foundation’s return on operating assets last year was about 10% per year. Experts say the secret to the Nobel Foundation’s longevity is △diversifying investments in various assets, △increasing the proportion of stocks other than the local market (Sweden), and △actively discovering alternative investments such as hedge funds, private equity, and real estate. says: There are many institutional investors struggling to improve their returns, so it may be a good idea to consider the annual reports prepared by the Nobel Foundation.

Finance Team’s Bank Watch >

SubscribeSubscribe

I also recommend these subscriptions!

• 

  Finance team’s bank watch

• 

  At Gwanghwamun

• 

  Reporter Lee Ho’s Market ON

Reporter Kang Woo-seok [email protected]

• great
  0dog

• I’m sad
  0dog

• I’m angry
  0dog

• I recommend it
  dog