Media set their gear befor annoucement of the 2008 Nobel Economics Prize laureate at the Royal Swedish Academy in Stockholm on October 13, 2008. - 

A Nobel Prize just isn't what it used to be. This year the Nobel Foundation had to cut the prize's cash award 20 percent. But the Swedes who run the world-renowned prizes have a plan to fix that. They're going to invest more money in hedge funds.

"If we can choose the hedge funds that we trust, then we can get better returns for given risks," Executive Director Lars Heikensten told Bloomberg News.

The Foundation has been hurt by poor investments returns and overspending. But Vanderbilt University finance professor Nicolas Bollen advises the Nobel Foundation to proceed with caution as it increases its investments in hedge funds.

"The experience that university endowments went through in the post financial crisis is that hedge funds are not a panacea," Bollen says.

Simon Lack, author of "The Hedge Fund Mirage," says there are good hedge funds out there and investing in big hedge funds is safer. "It's not that the whole industry is bad," Lacks says. "The problem is that the average dollar invested does poorly."

As of September, only 8 percent of hedge funds were outperforming the S&P 500. We wonder what Alfred Nobel would say about the foundation's new investing strategy. When the Swedish industrialist/dynamite inventor signed his will in 1895, he specified that most of his fortune be invested in "safe securities."

Follow Sarah Gardner at @RadioGardner