- Details
- By Chez Oxendine
- Real Estate
Twelve Clans, an investment arm of the Ho-Chunk Nation of Wisconsin, is expanding its focus with its first major real estate deal.
The tribally owned company announced it joined as an equity partner with two midwestern real estate companies on a $100 million apartment complex in the Minneapolis area. Twelve Clans will partner with Minnesota-based Monarch Holdings and Edina, Minn.-based Sentinel Management Company to finance development of the 303-unit multifamily complex in Golden Valley, Minn.
Financing on the property closed in late August, paving the way for the final stretch of development, per a Monarch Holdings statement.
Twelve Clans’ Interim CEO and Board Chairman Joe Brown Thunder, a Ho Chunk and Oglala Lakota Sioux tribal member, said conversations in May 2024 with Monarch brought Twelve Clans to the table on the project. By buying into a “small part” of the overall investment — Brown Thunder said he couldn’t share the exact amount yet — the development provided the tribal investor a chance to enter the real estate space with less risk.
“We're looking to get into real estate, but we're not trying to start an entire project from scratch,” Brown Thunder said. The tribal enterprise is actively exploring additional real estate investment opportunities in Minnesota and Wisconsin, with plans to make its next investment in Wisconsin near the Ho-Chunk Nation’s new casino.
“I think most portfolios that you see of organizations building generational wealth, real estate makes a huge portion of that,” Brown Thunder said. “That's something we identified as an income generator. This (deal) offers us the ability to get our foot into the proverbial pool without jumping in.”
The Golden Valley complex continues a wider shift in strategy for Twelve Clans, Brown Thunder said. Organized in 2016 as a sovereign wealth fund to benefit the tribe, Twelve Clans was mostly focused on passive investments. In 2022, it began to shift its focus to more active investments that would help it optimize returns for the tribe.
The Golden Valley investment is emblematic of that more active approach, Brown Thunder said.
“When you talk about sovereign wealth, you're talking about government revenues that are strategically used to benefit the nation or group, such as investing in these partnerships. Twelve Clans was started as passive income and private equity, but that’s changing,” Brown Thunder said.
Real estate was one of four investment “pillars” the company identified; the other three are acquisitions, private equity, and federal contracting.
The move into federal contracting comes amid soaring revenues for Native American entities that participate in the sector. Tribal entities, which can qualify for certain set-asides and government purchasing preferences, earned a record $23.3 billion in federal contracts in fiscal 2023, marking the ninth consecutive year of revenue growth for Native American owned entities in the federal sector.
To that end Twelve Clans has begun laying the groundwork for a federal contracting business under its umbrella, Brown Thunder said. The organization is looking at technology as a potential entry point into the sector.
“For us, my background and the background of some of the board is in the technology field, so I know we're trying to identify a technology entity we can get into,” Brown Thunder said. “I know cloud computing as well as infrastructure are areas that have huge growth potential in the future.”
Indeed, technology has been one of the fastest-growing industries in the federal sector over the past decade, according to research by HigherGov, a market intelligence firm that tracks federal contracting.
As Twelve Clans looks to build its investment portfolio and operations among the four pillars, partnerships — with other tribal entities, with local companies and contractors, and with larger collaborations with companies like Monarch and Sentinel — will be a common thread, Brown Thunder said.
“I think we're starting to see a lot more tribes getting into other businesses outside the federal and gaming arena. That's where my interest is, that's where I come from, and I see a lot of potential in partnerships — not only with tribal entities, but other local entities (and larger entities),” Brown Thunder said. “You need good partners, and you need to have that common goal to see growth manifest from that partnership, and that’s what we have here.”
Editor's Note: This story has been updated to reflect the project's total value of $100 million and to correct the last name of Twelve Clans’ Interim CEO and Board Chairman Joe Brown Thunder.
