Experts say Renkes' portfolio holding of KFx was unusually large
ANCHORAGE - KFx Inc. represented an unusually large part of state Attorney General Gregg Renkes' investment portfolio, according to independent financial experts.
KFx is the Denver company seeking to convert Alaska's low-grade Beluga coal into a high-energy fuel. It was Renkes' most actively traded stock and was worth $116,000, about 14 percent of the $817,458 portfolio at the end of September.
KFx has a coal-drying technology it says could make the undeveloped Beluga coal deposits across Cook Inlet from Anchorage attractive to Taiwanese buyers. Renkes brought KFx to the attention of state trade officials, and he reviewed an agreement the state signed last month with Taiwan to promote the sale of Beluga coal processed with KFx technology.
According to investment professionals, it was the most important holding in the attorney general's account, and gave him an "overweighted" position in KFx compared to a typical diversified portfolio.
Renkes' account held 62 stocks, mostly Fortune 500 firms such as Ford Motor Co. and Microsoft. The second biggest holding, General Electric, was less than one-third the size of KFx, and at 4.5 percent of the total portfolio it represented a more typical size, the investment experts said.
KFx was not only the single largest holding by far, Renkes traded no other stock more heavily. He bought or sold KFx shares on 11 occasions during the past year, boosting his holdings to 13,100 shares as of Sept. 28.
The attorney general has said his broker managed his stock account and bought and sold shares on his own. However, Renkes could trade stocks in his retirement account himself, and disclosure statements place 12,000 of the KFx shares in that account.
Renkes has said his broker, Dale Anderson, did the trading over the past year. Some financial experts find that hard to believe.
"It would be highly unusual for a broker to be adding to an overweighted position without the consent of the owner," said David Gottstein, an Anchorage investment adviser and owner of Dynamic Capital Management. "I suspect each one of these trades was directed by Renkes."