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Resource Based Public Trust Funds
Economic Innovation has helped many mineral
and energy rich states and nations to develop more than $50 billion of public
trust and development funds to mitigate constant repetitive cycles of boom and
bust, especially following the OPEC oil shocks of the mid 1970s. These public
mineral and energy trust funds were designed to recognize that oil, coal,
natural gas and mineral wealth are non-renewable resources that cannot be
replaced once they are removed from the earth. By "locking up" a significant
portion of these resources in constitutionally protected, resource-based public
trust funds, and then employing the income from corpus in the service of
improved education, health and renewable resource development, the non-renewable
resources are converted to ongoing, renewable uses. Following is
a description of the paradigm fund designed by Economic Innovation and a list of
the beta funds.
The Alpha Paradigm Fund:
The $28 Billion Alaska Permanent Fund
(1977)
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Economic Innovation was a principal partner
in a small consulting team engaged by the Alaska State Legislature to design
and implement what has become one of the world’s largest and most successful
constitutionally protected mineral trust funds. |
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The $28 billion Alaska Permanent Fund is an
inviolate public trust, enshrined in the State Constitution. The Fund
invests at least 25% of oil revenues generated by Prudhoe Bay as a nest egg
against Alaska's historic boom-bust economy. Based on the firm's
recommendations, the Permanent Fund adopted the highest state of the art of
large institutional portfolio management. |
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The Fund was among the first public funds to
adopt an aggressive strategy of investing in equities, alternative assets,
and overseas markets. As a result, The Fund has grown to have assets more
than $28 billion, pays an annual dividend to all Alaskans (especially
important in an economy in which many Alaskans and most Native Alaskans live
in a subsistence economy). |
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The Fund now generates more than enough
annual income to cover much of the public needs of the state. |
Similar Beta Funds
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Montana
Unified Investment Fund (1982) |
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New Mexico Severance Tax Permanent Fund
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Alberta, Canada, Heritage Savings Trust Fund
(1989) |
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Wyoming Permanent Mineral Trust Fund (1989) |
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Economic Innovation International, Inc.