• Alaska Native corporations, the long run

      Snigaroff, Robert G.; Baek, Jungho; Little, Joseph; Koskey, Michael; Williams, Maria; Zhou, Thomas (2019-08)
      Alaska Native Corporations as formed by the Alaska Native Claims Settlement Act (ANCSA) have existed for almost fifty years. As with all businesses, their results are mixed. Alaska Native Corporations (ANCs) are unique. After a brief overview of ANCs' results, I study several issues that pertain to them in a manuscript format with several chapters. Business stability and longevity are crucial for ANCs, and I discuss that, given a common mission of ANCs for cultural continuation. While most of the following is a positive analysis, I also make a normative strategy argument: ANCs should make larger portions of their economic activity in the form of endowment models. A separate matter is many ANCs have portfolios of diversified operating businesses. I review other investors' results in private equity investments opportunities. The average investor has done fairly poorly. This provides a cautionary warning to the pursuit of such strategies for ANCs and other institutional investors. Another business model alternative for ANCs are endowment models with marketable securities, hence, I study stock return characteristics. Interestingly, the way stocks can be broken out into their core return components allows study of an ANC issue. Alaska Native shareholders have made a trade-off between cultural continuation and higher monetary value realization if they did sell their shares. Of the approximately one hundred fifty ANCs, none has done so. Marketable security returns partly consist of a liquidity component. That has applicability to ANCs as they have willingly ceded the liquidity value of their shares for their goal of cultural continuation.