Casinos throw off lots of cash. To keep more of it on the reservation, the Sycuan tribe of the Kumeyaay Nation, a Native American community of 130 that operates a casino in the San Diego area, set up the Sycuan U.S. Value Fund in October.
Casinos throw off lots of cash. To keep more of it on the reservation, the Sycuan tribe of the Kumeyaay Nation, a Native American community of 130 that operates a casino in the San Diego area, set up the Sycuan U.S. Value Fund in October. “Financial services is an area we’ve got to get more sophisticated about, rather than investing all of our money with other money managers,” explains John Tang, president of the Sycuan Tribal Development Corp.
Other tribes have formed banks to help manage their finances, but Tang, 52, notes that Sycuan is the first to go the mutual fund route. Brandes Investment Partners of San Diego is subadviser of the large-cap value stock fund; the tribe will keep two thirds of the 1.5 percent management fee. Sycuan has put about $1 million of seed money into the fund and plans to begin marketing this quarter to both institutional and individual investors -- the minimum investment is $1,000 for individual retirement accounts and $5,000 for all others. The goal: $10 million to $30 million in assets by midyear, including cash from other California tribal gaming operations. According to a state government estimate made last fall, about a dozen tribes account for most of the $6 billion in gross annual gaming revenues at California’s Indian casinos -- more money than New Jersey’s gambling industry takes in each year and second only to Las Vegas’s.
Financial services is a natural diversification move for the tribe, says Tang, who points out that Sycuan has also invested more than $150 million in golf resorts and hotels. “Tribes are looking for ways to mainstream their investments and get into areas that are more in line with corporate America,” he says.