We have long been debating what should be done with the Legacy Fund and how it should be invested. It is critically important that we follow prudent investment strategies that best serve our citizens, find ways we can use our taxpayer resources to help diversify our state’s economy, and be certain that we aren’t investing in foreign companies that are a threat to our nation.
One of the biggest issues that our North Dakota businesses have had over the years is access to investment capital. Private Equity firms are heavily invested on the coasts, with areas like New York, Boston, San Francisco, and Los Angeles receiving 93% of the total investment pool in our country. That creates obstacles for startup firms in rural states like ours to get the capital needed to get to market.
The State Investment board has recognized this problem before, which is why the board authorized $300M to be invested in the Bank of North Dakota’s Loan Match guarantee fund. The time is right to do more.
In North Dakota, we already use dozens of out-of-state money managers to invest our taxpayer dollars. It is time to bring some of that management home and focus our investments on our people.
We should invest some of the principal of the Legacy Fund that will be managed by North Dakotans for North Dakotans. This concept is something that has been looked at for some time, and I believe now is the right time to move forward with it. Establishing a program that shift some of the Legacy Fund’s investments into a North Dakota Investment Advisory Committee would diversify our investment portfolio, bring invested funds into our state and generate market returns for the fund itself.
I’m proud of Commissioner Godfread for bringing this issue to the table, and for Board Chairman, Lt. Governor Sanford, for providing this idea good discussion and a fair hearing. I hope the SIB moves forward with this proposal. This will be a Win-Win for the citizens of North Dakota.