Investment Opportunities
Can Strengthen Indian Country

By: Julio Martinez, Chief Financial Officer | Mno-Bmadsen

Casinos have blessed many tribes with capital infusions but with competition growing and an uncertain regulatory environment, the time is now for leaders to diversify their swelling treasuries through a long-term strategic investment plan. Mno-Bmadsen’s Chief Financial Officer Julio Martinez makes the case for Indian Country’s opportunity to leverage the power of a diversified portfolio to strengthen self-sufficiency, enhance sovereignty and increase generational wealth expansion.

 

The time has never been better for Indian Country and her unique tribal citizens to develop self-sufficiency and enhance sovereignty by committing portions of their treasuries to invest in a diversified portfolio. Ever since congressional approval of the Indian Gaming Regulatory Act (IGRA) in 1988, federally-recognized tribes from around the country have negotiated agreements and opened different types of gaming venues that provide varying levels of profitability. Managed correctly, this windfall revenue stream has the potential to positively transform the futures of tribes and so many people.

Generally speaking, tribes invest for a handful of reasons:

  • Provide for future distributions of gaming or other profits to their members/citizens
  • Manage funds placed in trust for minors and other restricted types of tribal members/citizens
  • Develop non-gaming diversified revenue streams
  • Build generational wealth

The first step is for leaders to make the commitment to invest outside of the gaming industry. The second step requires thoughtfulness and strategy because getting the process right at the onset is key to success. A breakdown in portfolio development can result in harmful outcomes that can severely set back the tribe’s financial security and negatively impact its citizens.

The widely held belief that all tribes are similar is a fundamental mistake and invariably leads to confusion, misunderstandings, and at times litigation. While Indian Country is united on some levels of shared experiences, each tribe proudly has its own culture and as a result unique investment need. All of this will help to inform each tribe’s risk tolerance and the investment portfolio direction.

As the chief financial officer of Mno-Bmadsen, the non-gaming investment arm of the Pokagon Band of Potawatomi Indians in Northern Indiana and Southern Michigan, I am one of the first few on the front line of Indian Country investing. The company was launched in 2012 with the mandate to diversify the band’s business interests, revenue streams and wealth for future generations. One of the keys to our success has been our tribal leadership’s commitment to our long-term investment model. What is more, as an independently managed instrumentality of the tribe, Mno-Bmadsen’s employees, leadership and board of directors are not a politically elected group. This frees us to focus entirely on making prudent investment management decisions for the good of the tribe.

Based on the Pokagon Band’s culture, location and that we have been executing our investment thesis for some time now, Mno-Bmadsen’s long-term key strategic investment goals are to buy, hold and grow our portfolios of services (Seven Generations Group), manufacturing (Mno-DREK Group), and Commercial Real Estate (Red Tail Group). We avoid investing in companies with high R&D costs, such as medical research and early-stage companies, as well as businesses that are heavily regulated.

While times are still good for many who are engaging in the gaming industry in Indian Country, there is a sense of urgency for leaders to diversify because there are growing competitive pressures from other tribes as well as from state and local governments. The ever-present specter of increased regulation continues to loom as well.

As tribes plan for healthier and more vibrant futures that result from the sudden influx of money from the gaming industry, planning for the long-term financial health of future generations by diversifying investment portfolios is paramount. That strategy should be the result of thoughtful and careful engagement with tribal leaders, citizenry and other vital stakeholders. Executed correctly, the right investment strategy can add significant financial stability and thus social support to Indian Country for years to come.