Indigenous Communities Need Access to Equity Capital
By: John Jurrius
After sourcing and providing capital in partnership with Indigenous Communities in Canada and Tribal Nations in the U.S. for over 35 years, I know firsthand that accessing capital for the purpose of investing in their own rights and resources remains the most daunting barrier Indigenous Communities face in achieving their vision for self-determination.
Indigenous Communities and Tribal Nations fight everyday to make a better future for their communities, but without access to capital these communities cannot build commercial enterprises capable of supporting their own economies. A stable and self-sustaining economy enables the achievement of financial sovereignty, which brings with it self-determination. While some Provincial, State, and Federal Governments have made available best-in-class debt programs and enhancements, utilizing these programs is highly contingent on securing equity capital, and while the current venture capital and PE sectors have trillions of dollars under management, less than one basis point of those monies targets or specializes in partnering with Indigenous Communities. The resource industry has certainly begun to acknowledge Indigenous rights, as their projects intersect with Indigenous Communities, producing partnering opportunities for those affected communities, but this is driven by industry’s agenda. The Indigenous sector must have access to equity capital and knowledgeable partners to advance their own projects in the same manner as every other sector, which is why Indigena Capital has launched the first ever Indigenous private equity fund.
Of most interest, in this era of Responsible, Sustainable, Social and Impact investing, with many other filters, such as ESG and DEI that are all said to be paramount to today’s investment landscape; the number one question that we get asked when it comes to investing in the Indigenous space and our Indigenous Fund is, about “headline risk”. With any investment, it is an appropriate question, but it actually seems to be the number one deterrent for many investors in consideration of their entry into the Indigenous space or our fund. The space is devoid of capital, meaning latent opportunity is abundant like in any emerging market. Add to that, a demonstratable track record of above average returns for investors that have invested in the space, a long pipeline of opportunity, and quantifiable impact, these factors should attract investment, but it appears to be the perceived political risk of investing in the space that is on the forefront of investor’s minds. I get it, it is a sui generis space - unknown to most investors, but it seems that for many, this metric of headline risk alone prevents their consideration of investing in the space, versus evaluating the greater opportunity and looking under the hood to understand how the economics enable investor returns and the growth of Indigenous economies.
This all becomes ironic when you consider that trillions of dollars are now moving to funds that prioritize Social and Impact themes, but a space that is regularly talked about, where capital could have a direct quantifiable impact and bring about positive social change for generations, cannot attract capital because of headline risk. I would make the case that you cannot actually have an impact or bring about meaningful change without these risks. Challenging the status quo with meaningful change is hard, and it gets talked about, but it is how important change happens.
I can report that, based on our 37 years of partnering with Tribes in the U.S. and Indigenous Communities in Canada, these Nations are great partners and are committed to eradicating poverty in their own communities, while building needed commercial economies for their sustainability. It is up to the investment community whether they want to understand the space and help bring about change. Remember, poverty ends more lives than cancer plus any other disease while contributing to both, but it is something that we have the ability to change in real time.
I look forward to the day when questions on investing in the Indigenous space are about the quality of the proprietary transactions, investment horizons, partners, execution, exit strategies, and the ability to deliver the appropriate returns, and impact.
I challenge the investment community to join us through our fund or their own initiatives to bring needed capital to the Indigenous space and for those already investing in this space, thanks for taking the lead.
John Jurrius is the CEO of Indigena Capital and has been partnering with Indigenous Nations across North America for over 37-years to provide them the equity capital and business models to empower their rights and resources and create commercial enterprises that will support their vision of self-determination.