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Port: The North Dakota Growth Fund's first investment is in ... St. Louis?

The North Dakota Growth Fund was created to direct Legacy Fund dollars to investments in North Dakota, with a preference to be given in that process to North Dakota financial management firms. So far we have California-based Callan recommending Chicago-based 50 South Capital which, in turn, has selected as its first investment a St. Louis-based firm with some nebulous connection to North Dakota that nobody involved in the deal is willing to define.

N.D. Capitol building.jpg
North Dakota State Capitol in Bismarck. Special to The Forum

MINOT, N.D. — Earlier this year wide majorities in the state Legislature passed House Bill 1425 which directed the investment of 20% of the state's Legacy Fund into North Dakota companies and projects.

It's a wonderful idea, aimed at leveraging some of our billions in the Legacy Fund to build infrastructure and provide capital to ventures in our state.

That fund has, since its inception, been invested in companies and infrastructure bonds around the nation and the world. All House Bill 1425 does is direct a percentage of those investments toward those sorts of opportunities in our state, while also asking that North Dakota firms be given an opportunity to manage those investments.

Unfortunately, the implementation of the policy has, so far, been something less than inspiring.

The California-based consulting company Callan , which we've learned has a habit of recommending for hire money management firms it also takes money from , recommended a Chicago-based firm called 50 South Capital to manage the first phase of investments under H.B. 1425.

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This is a program called the North Dakota Growth Fund. It has a website and everything.

PHOTO: Burgum signs House Bill 1425
With supporters and legislative backers looking on, North Dakota Gov. Doug Burbum signs House Bill 1425 into law. The bill, introduced by Rep. Mike Nathe, R-Bismarck, would direct 20% of the Legacy Fund's principal balance into investments in North Dakota businesses and infrastructure. (Photo courtesy of Gov. Doug Burgum's office)

The North Dakota banking industry wanted that work — “We’ve been banging our head against the wall for 12 years" to manage Legacy Fund dollars Rick Clayburgh , president of the North Dakota Bankers Association , said earlier this year — but they didn't get it.

The folks on the State Investment Board rubber-stamped this recommendation from Callan, which is their unfortunate custom. Like so many of North Dakota's leaders, those folks can't seem to tie their shoes without hiring a consultant to tell them how to do it.

Now 50 South Capital has announced the first investment of the North Dakota Growth Fund and it went to Lewis & Clark AgriFood which is based in St. Louis.

The news release announcing the investment tells us that Lewis & Clark AgriFood is "a leading venture capital firm with a specialized expertise in a core industry of North Dakota’s economy." It claims the firm "has a track record of investing in the state."

Since this is the North Dakota Growth Fund we're talking about, a pool of money the Legislature directed toward investments in North Dakota, I decided to try and find out the specifics of Lewis & Clark AgriFood's past work in North Dakota that was the basis for this investment.

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I was basically told to get bent.

READ MORE FROM ROB PORT

I sent an email to Tom Pinto, who was listed as the contact in the news release. "L&C is in best position to discuss their investment track record," he told me in a terse, one-line email.
I tried emailing Bob Morgan, a director at 50 South Capital, and received another reply from Pinto. "I understand you also emailed Bob Morgan yesterday. All inquiries should be sent to me. However, we don’t have anything to add," was his emailed reply.

I tried taking Pinto's advice to talk to Lewis & Clark AgriFood directly. "At this time, we are directing all questions to Tom Pinto," was the exasperating response I got from Jessie Chapel, an investor relations manager for the firm.

Again, the North Dakota Growth Fund was created to direct Legacy Fund dollars to investments in North Dakota, with a preference to be given in that process to North Dakota financial management firms. So far we have California-based Callan recommending Chicago-based 50 South Capital which, in turn, has selected as its first investment a St. Louis-based firm with some nebulous connection to North Dakota that nobody involved in the deal is willing to define.

Oh, and did I mention that we're not allowed to know how much was invested in Lewis & Clark AgriFood? "Company officials refused to disclose the investment amount to the Tribune, citing confidential information," Bismarck Tribune reporter Jack Dura tells us .

That's a hell of a thing, isn't it?

I guess we rubes are supposed to shut up and let the smart out-of-state people handle our money.

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To comment on this article, visit www.sayanythingblog.com

Rob Port, founder of SayAnythingBlog.com, is a Forum Communications commentator. Reach him on Twitter at @robport or via email at rport@forumcomm.com .

Opinion by Rob Port
Rob Port is a columnist and podcast host for the Forum News Service. Reach him at rport@forumcomm.com.
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