On November 27, 1895, a year before his death, Alfred Nobel
signed the famous will which would implement some of the goals to
which he had devoted so much of his life. Nobel stipulated in his
will that most of his estate, more than SEK 31 million (today
approximately SEK 1,500 million) should be converted into a fund
and invested in "safe securities."
The income from the investments was to be "distributed annually
in the form of prizes to those who during the preceding year have
conferred the greatest benefit on mankind."
The Nobel Foundation is a private institution established in 1900
on the basis of the will. The investment policy of the Foundation
is naturally of paramount importance to the preservation and, if
possible the augmentation of the funds and, thus, of the prize
amount. According to the original 1901 investment rules, the term
"safe securities" was, in the spirit of that time, interpreted to
mean gilt-edged bonds or loans backed by such securities or
backed by mortgages on real estate. With the changes brought
about by the two World Wars and their economic and financial
aftermath, the term "safe securities" had to be reinterpreted in
the light of prevailing economic conditions and tendencies. Thus,
at the request of the Foundation's Board of Directors, in the
early 1950s the Swedish Government sanctioned changes, whereby
the Board for all practical purposes was given a free hand to
invest not only in real estate, bonds and secured loans, but also
in most types of stocks.
From 1901, when the first prizes (SEK 150,000 each) were awarded,
the prize amounts declined steadily. But with this freedom to
invest, along with the long-fought-for tax-exemption granted in
1946, it was possible to reverse this trend and, on average, even
keep pace with increasing inflation. The real value of the prize
amount in SEK terms was finally restored in 1991. The amount of
the 2007 Nobel Prize is SEK 10.0 million.
The invested capital at market value as per December 31, 2006,
amounted to SEK 3,584 million (approx. USD 520 million). Foreign
and Swedish assets accounted for 68 and 32 percent,
respectively.
The following table shows the market value of invested capital by
type of assets (%):
Dec. 31, 2006 | Dec. 31, 2005 | |
Shares | ||
Sweden | 5 | 4 |
Europe excl. Sweden | 20 | 19 |
USA | 29 | 37 |
Japan | 6 | 3 |
Other countries | 4 | 5 |
64 | 68 | |
Interest-bearing Investments | ||
Sweden | 23 | 26 |
Other countries | 1 | 0 |
24 | 26 | |
Alternative Investments | ||
Property | 3 | 2 |
Hedge funds and unlisted share funds | 5 | 0 |
8 | 2 | |
Total Portfolio Capital | 96 | 96 |
Administrative real estate holdings | 4 | 4 |
Total Invested Capital | 100 | 100 |
To a table showing Prize Amounts
To a table of the Income Statement
Copyright © The Nobel Foundation 2007