GZHUADE Blog

On March 31, the fund had $42.1 billion in assets.

“We can look at what we can do to improve the returns, and yet be cautious,” Christmann said. “At least for my vote, (the strategy) is going to have to be something very conservative. It isn’t just money we can invest recklessly.”

Analysts initially estimated the Legacy Fund would have a $618 million balance by June 30, 2013, when the state’s current two-year budget period ends.

North Dakota’s burgeoning oil production has provided a gusher of money for the fund. The state’s March production of 17.8 million barrels is almost triple its output of three years ago.

“This is in line with what we expected,” Schulz said.

North Dakota voters approved the fund’s creation in November 2010, when they endorsed a constitutional amendment that requires setting aside 30 percent of North Dakota’s tax revenues on oil and natural gas production.

An oil tax trust fund that was established by the state of Alaska in 1976 had a similarly cautious beginning to its investment policy, said Laura Achee, a spokeswoman for the Alaska Permanent Fund Corp.

Schulz said Thursday the Legacy Fund was on track to earn a 2.5 percent annual return. It is invested in short-term U.S. bonds, including Treasury debt and bonds guaranteed by government agencies, he said.

The amendment bars the Legislature from spending any of the fund’s assets until June 2017. After that, a two-thirds vote of the North Dakota House and Senate is needed to spend any of the fund’s principal. Lawmakers may not withdraw more than 15 percent of the principal every two years.

Lawmakers later broadened the fund’s options to include stocks and real estate. Investment decisions are now made by the Permanent Fund’s board, and its portfolio includes stocks, bonds, real estate and stakes in private equity ventures, the fund’s financial disclosure filings say.

An investment advisory board, set up by the Legislature last year and headed by Sen. Randy Christmann, R-Hazen, decided in December that the Legacy Fund should be invested exclusively in low-risk bonds.

For the first six years of its existence, the fund was limited to investing in bonds, Achee said Thursday.

Christmann said the money needed to be cautiously invested since it’s unclear whether the Legislature will want to spend some of the fund as soon as lawmakers are allowed to do so.

The fund had almost $352 million in oil taxes on Wednesday, state Treasurer Kelly Schmidt said. When investment earnings were included, its balance was $353.1 million, said Darren Schulz, deputy chief investment officer for North Dakota’s Retirement and Investment Office.

Since the first payment into the fund was made last September, monthly deposits have averaged $39.1 million, records show. Should the trend hold, the fund’s balance would exceed $860 million in June 2013.

BISMARCK, N.D. (AP) — North Dakota’s newly created trust fund for oil taxes has had thin earnings, but the results are in line with a conservative investment philosophy that excludes stocks, money managers said Thursday.

“We’re in a very different place than we were,” Achee said.

“We didn’t want to take a chance on losing any of the principal,” said Pam Sharp, the state budget director, who is a member of the advisory panel.

The chairman of an advisory board that drafted the Legacy Fund’s investment plan said its details could be revisited after North Dakotans decide the fate of a proposed constitutional amendment to abolish property taxes. The amendment, called Measure 2, is on the June 12 primary election ballot.

“The oil production is really ramping up. It all depends on that,” said John Geissinger, director of the Retirement and Investment Office, which oversees how the fund is invested.

Christmann is the assistant Republican majority leader in the North Dakota Senate and the GOP’s candidate for the state Public Service Commission this fall. He is competing with Democrat Brad Crabtree for a spot on the three-member utility regulatory board.

Since debuting Honor about two years ago, designer Giovanna Randall has cultivated her feminine label as meticulously as an orchid. Case in point: In an unusual business move, Randall opened up a standalone boutique in the Meatpacking District (after just two seasons under her belt), where her designs have sold exclusively until now. By keeping things small-scale, she has been able to develop Honor’s identity without yielding to the demands of retailers. This has allowed her to fine-tune the production process—using top-notch fabrics like substantial crepe, python-stamped silk, and delicate tulle from Europe, while constructing everything locally in New York—before going big.

This attention to detail is evident in Honor’s cleverly crafted clothing, which is favored by cool girls like George Clooney’s The Descendants co-star Shailene Woodley, who turned up at a recent Hunger Games premiere in an Art Deco, floral-print silk maxi dress from Fall. (According to Randall, her new collection tells the love story of a preppy college guy who meets an Argentinian ingenue while studying abroad, and reflects the merging of their two worlds.) Eveningwear looks have emerged as a calling card, perhaps because of the brand’s increasing celebrity fans—Woodley and Alexa Chung sat front-row at the latest runway show. But Honor also excels with everyday pieces, including flirty frocks and tailored shorts suits, not to mention noteworthy accessories like sharp briefcases and suede platform pumps from a collaboration with Tabitha Simmons.

Today, the label launches the e-commerce component of its Web site—standard operating procedure for most lines. But what’s noteworthy here is that customers can place special orders for pieces that were never produced from past seasons, indicating Randall’s bespoke approach to design. So, for example, Honor will custom-make one of its editorially appealing yet less practical petticoats that appeared in the Spring collection. Here, check out the label’s new Spring ad campaign, styled by Kate Young (who, last week, was crowned as Hollywood’s top stylist), debuting exclusively on Style.com.
—Brittany Adams

Photos: Courtesy of Honor

Photo: Courtesy of Celine

It’s a near infallible axiom of fashion that if John Galliano sends it out, it’s more likely than not to kick off a trend. So when the Fall ‘10 Dior show featured riders on the runway, no surprise, a few months later, to find equestrienne-inspired gear here, there, and everywhere. No horsewoman skills necessary—rest assured, these barn-ready, covetable Celine boots for Fall look just as good on the pavement. And for more of the equine looks we’re in the mood for these days, check out our new roundup.

Celine high Chelsea boot, available at Barneys New York, www.barneys.com.