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Some investors are looking at underserved markets as targets for new investment, especially regions that historically have been overlooked by private-equity players like venture capitalists.
Last week, a group based in Silver Spring, Md., and Washington state announced plans to raise a private-equity fund to go after the American Indian market. Launched with a federal grant from the Community Redevelopment Act of 2000, Native American Capital hopes to lure investors to large-scale projects that involve tribally controlled assets in areas like health-care services, rural-environmental-based businesses, long-distance education and Internet retailing for arts and crafts.
Investor Walter Hillabrant is a member of the Citizen Potawatomi Nation of Oklahoma. His partner Patrick Borunda, a former director of the Portland branch of the Federal Reserve Bank's western district, is of Tarahumara and Mescalero Apache descent. They join partner Joseph Falkson and a national board of Indian Americans whose mission is "to bring the message to the major capital markets that there now is some significant financial-services talent focusing on Native America tribes," says Mr. Falkson. He says the team hopes to raise a $100 million fund next year. Their plan is to make direct investments as well as co-invest with regional venture-capital funds and tribes that have accumulated wealth from casinos and now are looking for reinvestment opportunities. Another potential lure for investors: Federal tax credits that are given in exchange for equity.
Compiled By :
Ann Grimes with contributions from Carl Bialik, Pui-Wing Tam and Vauhini Vara
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