North Dakota Boosts In-State Investments Through Legacy Fund Expansion
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bismarck, ND – The State investment Board (SIB) is considerably increasing its commitment to North Dakota’s economic growth by expanding the Legacy Fund’s in-state investment program. The SIB has brought on GCM grosvenor, a global firm specializing in alternative asset management, to oversee real asset investments. Additionally,the board has increased its financial commitment to 50 South Capital,which manages the program’s private equity and venture capital investments,reinforcing its dedication to fostering local businesses and innovation.
New Investments to Boost North Dakota’s Economy
The North Dakota Retirement and Investment Office,responsible for managing the program,aims to generate competitive returns by strategically investing a portion of the Legacy Fund within the state. This initiative is designed to support local opportunities and drive economic development. According to the North Dakota Office of the State Treasurer, the Legacy Fund was established to provide long-term economic benefits for the state.The fund was created in 2010.
Did You Know? The Legacy Fund was established after North Dakota voters approved a constitutional amendment in 2010, dedicating a portion of oil tax revenues to the fund.
GCM Grosvenor to Manage Real Assets
GCM Grosvenor will spearhead the new real assets mandate with an initial commitment of $150 million, which will be deployed over the next three years. These real assets will encompass investments in sectors such as real estate, infrastructure, natural resources, and agriculture, providing a diversified approach to supporting North Dakota’s economy.
Increased Support for Private Equity
earlier this year, the SIB demonstrated its confidence in the North Dakota Growth Fund by increasing its commitment to 50 South Capital from $100 million to $250 million. This significant increase will further bolster North Dakota businesses and entrepreneurs through targeted private equity investments. The anticipated pace of these investments is projected to be between $30 million and $40 million annually.
Pro Tip: Diversifying investments across multiple sectors can definitely help mitigate risk and ensure a more stable return on investment.
Legacy Fund’s Current In-State Investments
As of March 31, the investment board reported that over $500 million of the $11.9 billion Legacy Fund has already been invested within North Dakota. 50 South Capital has committed $111.5 million across seven funds and four direct co-investments, supporting 23 North Dakota businesses. Additionally, fixed-income investments through the Bank of North Dakota total $391 million, including nine Match Loans valued at $299 million and 23 Infrastructure Loans valued at $92 million.
| Investment Type | Amount | Details |
|---|---|---|
| 50 South Capital Commitments | $111.5 million | Across 7 funds and 4 co-investments |
| Bank of North Dakota Fixed Income | $391 million | Includes Match Loans and Infrastructure Loans |
| Total In-State Investment | Over $500 million | As of March 31 |
Looking Ahead
Established in 2021, the in-state investment program is guided by a Legacy Fund investment policy adopted in July 2023. This policy targets $600 million for in-state equity investments and $700 million for in-state fixed income. However,a pacing analysis projects that it will take until 2030 to fully achieve this mandate. All investments made through the program must be managed by autonomous, third-party managers, ensuring transparency and accountability.
What impact do you think these investments will have on North Dakota’s economy? How can local businesses best leverage these opportunities?
Understanding Sovereign Wealth Funds
Sovereign wealth funds (SWFs) are state-owned investment funds composed of money generated from a country’s reserves. These reserves may derive from various sources, such as commodity revenues, foreign currency reserves, or transfer payments from government surpluses.swfs invest these funds to generate returns that can benefit the country’s economy and citizens. according to a report by the Sovereign Wealth Fund Institute, global SWF assets reached approximately $11.5 trillion in 2024.This highlights the significant role they play in the global financial landscape.
Frequently Asked Questions About the legacy fund
- what is the purpose of the Legacy Fund?
- The Legacy Fund is designed to provide long-term economic benefits for North Dakota by investing oil tax revenues.
- How are investments managed within the Legacy Fund?
- Investments are managed by the State Investment Board (SIB) and third-party managers to ensure transparency and accountability.
- What types of businesses are eligible for investment through the north Dakota Growth Fund?
- The fund targets North Dakota businesses and entrepreneurs seeking private equity and venture capital investments.
- What is the timeline for achieving the in-state investment mandate?
- A pacing analysis projects that it will take until 2030 to fully achieve the in-state investment mandate.
- how does the Legacy Fund contribute to North Dakota’s economic stability?
- By generating competitive returns and supporting local businesses, the Legacy Fund enhances economic stability and growth in North dakota.
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