The Nobel prize was almost “spent”

  As we all know, 119 years have passed since the Nobel Prize was first awarded in 1901. Except for a few years when the World War was interrupted, a large number of bonuses were given out every year, and more and more in the future. According to Alfred Nobel’s will, the bonus should be equivalent to “a 20-year salary of a university professor.” How rich is Nobel? The bonus has not been distributed until today?
“The King of Dynamite”

  Although Alfred Nobel made the name “Nobel” universally known, he is not the richest person in the family.
  On October 21, 1833, a thin baby was born in Stockholm. He was later the “King of Dynamite”. Nobel has a total of 4 brothers, two elder brothers Robert and Ludwick, and younger brother Emil. The family was impoverished at first. To make a living, their father Emmanuel Nobel moved to St. Petersburg when he was young. Fortunately, he won the favor of the czar by inventing sea mines and won a medal awarded by the czar. Since then, he has made a fortune in Russia, mainly operating ship power equipment and machinery manufacturing. Several children followed their father to receive education in Russia since childhood, and they all learned Russian.
  Under the influence of his father, Alfred became a “scientific maniac”. He showed great interest in chemistry since he was a child, and his obsession with scientific invention reached its peak. In his own words, “every bit of acquisition on the road of scientific research is like waiting for budding in the ruins.” Since the age of 18, Nobel has been committed to finding an answer-how to safely control explosives so that they can be used to open mountains. Civil scenes such as road digging.
  In order to develop a safe and controllable explosive, Alfred paid a huge price-in an explosion, his four assistants and his younger brother who was in college were unfortunately killed.
  Alfred obtained 355 invention patents in his lifetime, and 129 invention patents for explosives alone. In addition to being obsessed with science, he is also a successful businessman. With his own explosive technology, Alfred opened nearly 100 factories in 21 countries including Germany, the United States, Russia, Britain, France, Sweden, and Finland to produce artillery and other weapons and equipment. With more than 10,000 employees, he not only accumulated huge wealth, but also developed the company into a pioneer of modern multinational companies.
Rich and Enemy “Three Kingdoms”

  However, if only the wealth is compared, Alfred’s two brothers are richer.
  In the 1870s, his two older brothers established the “Nobel Brothers” oil company in Baku, Azerbaijan, which was the first foreign company in Azerbaijan. Through the acquisition of a large number of oil fields and large-scale industrial production of oil, their wealth quickly accumulated and continued to expand. They monopolized the oil trade in the Caucasus and were the largest exporter of Russian oil. Their company’s oil production alone accounted for 9% of the world’s total production at that time.
  As of the end of the nineteenth century, Ludwig’s children ran the world’s largest oil company at the time, with assets even exceeding the GDP of Norway, Sweden, and Denmark, making it a “rich country”.
  Alfred also owns 10% of his brother’s company. His assets were also injected into the Nobel Foundation after his death in 1896 and became part of the Nobel Prize.
  In 1888, when his brother Ludwick died, several newspapers mistakenly regarded Ludwick as Alfred. A French newspaper published an obituary with the headline “The businessman who made the death died.” Nobel read this obituary and was deeply shocked. For the first time, he realized that the world remembered him in this image. This is very different from the image he considers as a “peace lover”. For this reason, he decided to donate most of his property to establish the Nobel Prize after his death, in order to leave a “better legacy”.
  Nobel’s decision retained part of the “assets” of the Nobel family. In the Russian October Revolution in 1911, the Nobel Brothers Oil Company suffered a catastrophic disaster-the former Soviet Union confiscated all the Nobel family’s property and nationalized it, and family members fled from Russia and Azerbaijan to Sweden or Finland. The huge wealth of the Nobel family has since disappeared.
  After the family declined, members of this family began to engage in different professions, some in the business sector, and some became doctors and teachers.
It took more than a hundred years, and 4.073 billion left

  On December 10, 1896, Alfred died of a heart attack in Italy. At that time, 31,587,200 Swedish kronor (about 1.794 billion Swedish kronor today) was left for the issuance of the Nobel Prize.
  According to Nobel’s will, the annual Nobel Prize is divided into five, which are called the Physics Prize, Chemistry Prize, Physiology or Medicine Prize, Literature Prize and Peace Prize.
  Among them, the establishment of the Peace Prize also originated from a love story. It turned out that Nobel was unmarried all his life. At the age of 42, he met a woman he liked, named Berta Sutner, a secretary he recruited in Vienna.
  Nobel liked Suttner very much, but she had another love, and eventually married her childhood sweetheart. Nobel and Suttner have always maintained contacts. Suttner is a pacifist and often discusses peace issues with Nobel. She believes that Nobel’s explosives will bring war, but Nobel argues that his explosives are more effective in stopping wars than Sutner’s peace movement.
  More than a decade after Suttner resigned, Nobel found a new secretary. Later generations believed that the establishment of the Peace Prize in his will was undoubtedly influenced by Suttner. The Nobel Peace Prize in 1905 was also awarded to Suttner.
  The Nobel Prize is managed by the Nobel Foundation established in 1900. The Nobel Foundation divides the fund into two parts. The larger part is used as a “bonus fund” (about 28 million kronor); the remaining part is used to establish a “building fund” and an “organization fund”, which are used to pay The rent of the administrative building and the hall used for the annual award ceremony, as well as the organization costs of five Nobel Societies.
  Taking 2018 as an example, according to the data of the Nobel Foundation, the total expenditure of the Nobel bonus and operating expenses that year was 89.6 million Swedish kronor (65 million RMB). Among them, the total bonus of the year was 36 million Swiss francs, the remuneration of the Nobel Committee was 27.4 million Swiss francs, the activity cost of the Nobel Prize Week was 14.2 million Swiss francs, and the annual management cost was 12 million Swiss francs.
  The awards plus operating expenses have consumed more than 100 years of assets. At the end of 2019, the Nobel Foundation had an investment capital of SEK 4.9 billion, which was more than 100 times the value of assets when it was established. People can’t help but wonder how the Nobel Foundation manages its assets so that it can make money?
The bonus was almost “spent”

  In fact, the Nobel Prize was almost “spent”.
  According to Alfred Nobel’s will, the fund can only invest in “safe securities”, such as bank deposits and bonds, and the interest generated cannot outperform inflation. Coupled with factors such as war and government tax increases, the foundation’s money is getting less and less, and the Nobel Prize once shrank to 114,935 kronor in 1923.

  In 1901, the single prize of the Nobel Prize was 150,000 Swedish krona, which is equivalent to 8.722 million Swedish krona in today’s currency. However, this money can be described as “debut is the pinnacle”, starting from the second year, the Nobel Prize has shrunk year by year. In the following 90 years, the amount of the Nobel Prize was much lower than this amount.
  In most years after 1901, the Nobel Prize amount was only 30% to 40% of the first year.
  A major turning point occurred in 1953, when there were benefits such as tax exemption. The foundation was also approved by the Swedish government to freely invest in the stock market and real estate, bonds and secured loans, and the investment strategy changed from conservative to active.
  The Nobel Foundation handed over its assets to many well-known international fund institutions for management. One of the managers was Foster Fleis, who was named “one of the greatest investors in the 20th century.” He founded the Brandy Fund in 1986. Before he reselled the company to AMG in 2001, he obtained more than 1,000% of cumulative income. At that time, his clients were not only the Nobel Foundation, but also the Morningstar Group, which specially rated the funds. Pension account.
  The Nobel prize finally reversed in 1991. That year, the Nobel Prize amounted to 6 million Swedish krona, which is about 8.83 million Swedish krona today. After a lapse of nearly 90 years, it was the first time that it returned to the same amount as the first prize. Since then, the Nobel Prize has become more and more generous, and has maintained the annual standard of more than 8 million Swedish kronor.
Little housekeeper

  In order to achieve sufficient long-term returns and provide a financial basis for the issuance of the Nobel Prize, the asset management of the Nobel Foundation must fully consider the risks of all aspects of the financial market.
  The foundation believes that after the goal is achieved to outperform inflation, an annualized rate of return of 3.5% can cover the future expenses of the Nobel Prize. For this reason, the Nobel Foundation has further stipulated the specific distribution requirements of various assets. So what is the current portfolio of positions?
  We can look at the investment portfolio of Nobel funds as of the end of 2018: 44% invested in stock funds and stock index options; 9% invested in real estate funds; 15% invested in fixed income assets; 33% invested in alternative assets; There is a -1.5% currency loss.
  The risk of equity investment is relatively high. Nobel Fund’s equity investment is evenly distributed in various stock markets, including the Swedish stock market, other European stock markets, the US stock market, and emerging country stock markets.
  Of course, as long as it is an investment, there are risks. In the 2008 financial crisis, the total investment income of the Nobel Foundation fell 19% that year. According to the Nobel Foundation, as long as the foundation can obtain an investment income of not less than 3.5% per year, the Nobel Prize can still be issued. I have to say that the Nobel Foundation is really a small housekeeper.

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