Twelve Clans, Inc. holds annual meeting

By Marlon WhiteEagle

Twelve Clans, Inc., the Ho-Chunk Nation’s federally chartered corporation, held its annual shareholder meeting. This is the second annual meeting held by Twelve Clans, Inc.
This year’s annual meeting met quorum, which is set at 60 shareholders.
The Twelve Clans, Inc. Board of Directors are Chairman Jason Lambert, Vice Chairman Jay Calhoun, Treasurer Joanne Whiterabbit, and Secretary Kelly Smith-Haley.
In its first year, Twelve Clans, Inc. held its first election, created bylaws, set up a tax identification number and bank account, and figured out its communication practices.
“Twelve Clans, Inc. was created to address the Ho-chunk Nation’s overdependence on gaming revenue.  Currently, 85 percent of gaming revenue funds the Nation,” Lambert said.
“Separating business and government was the desire of the people, and that was completed through the General Council process. The separation is there, and is reinforced by a best in class investment office,” Lambert said.
In October 2016, the Ho-Chunk Nation Legislature passed a resolution approving $95 million in capital commitment to Twelve Clans, Inc. over a six year period.
In the first year, Legislature appropriated $20 million from the Nation’s long term reserves. In the next five year period, $15 million in capital will be committed.
The board of directors discussed limiting a high overhead cost in investing. They cited Ho-Chunk Inc. as the successful business model in Indian Country. Ho-Chunk Inc. records nearly $160 million in assets, but profits $18 million.
“Twelve Clans, Inc. is thinking on a digital global basis to set our benchmark for sovereign wealth basis. We are a part of the new global sovereign wealth funds. The Ho-chunk Nation is leading the way,” Lambert said.
“The Ho-Chunk Nation’s assets rely heavily on gaming and natural resources. Assets around gaming are limited to specific markets.  We want to be prepared for crisis situations if gaming revenue is lost.”
Vice Chairman Calhoun also spoke about the goals of Twelve Clans, Inc.
“Twelve Clans, Inc. grew from the concept of becoming the future driver of wealth for the Ho-chunk Nation.  We are not a tribal holding company, but take some of the best practices from them,” Calhoun said.
“We aren’t just investing in 401Ks, or stocks and bonds. We will take deliberate risks, and may have losses. But we’ll compartmentalize those losses to avoid them in the future.”
“We will offer the best in class investment office,” Calhoun said.
Chairman Lambert discussed the inter-generational focus of Twelve Clans, Inc.
“Twelve Clans, Inc. will develop in phases, and those phases will evolve. Right now, we are looking at things from a startup perspective. We have to build our portfolio strategy and go through the frameworks to generate income,” Lambert said.
Treasurer Whiterabbit also spoke about the focus of the board.
“We’ve had one small investment.  We have to look at the initial opportunity and follow due diligence before making a commitment.  We’ve had 45 looks at investment opportunities through our network,” Whiterabbit said.
“We are not staffed to c-stores or manufacturing companies. We are interested in viable opportunities that fit the mechanics of investments.”
Chairman Lambert said the board will probably say more no’s than yes’s.
“We want to keep our business risks low, and expenditures low. We are not an operating company. We are not franchising other companies. We are interested in fund investment,” Lambert said.
“We want investments to be diversified. We don’t want to make two or three $30 million investments. We want to make investments in the $5 million range, as many as we can.”
Twelve Clans, Inc. can distribute money in two ways. One option is to give money back to the government, or they can pay dividends to the tribal members.
The investment policy statement breaks down options to pay dividends at one percent with $250 million in assets, two percent with $500 milllion, three percent with $750 million, and four percent with $1 billion in assets.
“It’s difficult to look at,” Lambert said.
“Our current assets are $23.4 million and our goal is $1 billion in assets.  We have a high growth need, and we plan to multiply or grow our asset base,” Lambert said.
Twelve Clans, Inc. also held its first election for a slate of candidates to until 2021.  David Greendeer was on the ballot to fill the requirement of having at least two Ho-Chunks on the board. Lambert and Calhoun were also on the ballot for re-election.
There were 63 ballots were casted. 53 votes in favor. Seven no votes, and three abstentions. Jay Calhoun, David Greendeer, and Jason Lambert will serve a five year term on the board of directors.
Tribal members got a chance to ask questions of the board. Treasurer Whiterabbit answered the question, where’s the money now.
“Everyone wants to know what’s happening with the money. Twelve Clans, Inc. received $2.7 million from the Ho-Chunk Nation for a three year period as startup funding. In April 2017, we received $20 million in capital. Today, our current assets are $23, 943,478.50,” Whiterabbit said.
Twelve Clans, Inc. shows a profit of $1.24 million to date.
Whiterabbit also answered the question about what companies Twelve Clans, Inc. has invested in.
“We will compile a detailed report of investments. We will undergo an audit and release a financial statement of audited investments. Our bylaws give us 120 days from completion of the audit to provide the financial report,” Whiterabbit said.
Chairman Lambert also answered the where’s the money now question.
“Where is the money now? We’ve created investment accounts, where 80 percent of the capital is in an index fund, while 20 percent is in a bond fund,” Lambert said.
“We have investments in global markets, or emerging markets, with countries like India, Brazil, and Russia. There are publicly traded bond funds.”
Public investments allow investors to get in and get out when they are not generating returns. Private market investing is where growth and returns happens. Twelve Clans, Inc. plans to focus on private market investing.
“We want no overhead costs. This will lead us direct to make more money,” Lambert said.
“The Nation has set up a good structure. You’ve broken the mold in Indian Country. Future generations will be grateful,” Lambert said.