Key Takeaways
- • Hawaii Employees' Retirement System (ERS) committed an additional $25 million to the Hawaii Targeted Investment Program (HiTIP) in late May 2020, bringing total pension fund commitments to $75 million across three funding rounds.
- • HiTIP, managed by Stafford Capital Partners and created by state legislature in 2007, channels capital into local venture capital firms with portfolio companies based in Hawaii; the program has committed to 21 investment funds that have reviewed approximately 650 Hawaii-based companies.
- • ERS signals intention to increase commitments to local venture capital fund managers, with some expected to double from previously forecasted levels, as the pension plan seeks to support economic recovery and reduce Hawaii's economic vulnerability exposed by COVID-19 supply chain disruptions.
- • Elizabeth Burton, CIO at ERS, framed the investment as leveraging technology and innovation to simultaneously generate private equity returns while addressing local economic needs during the pandemic recovery period.
Summary
The Hawaii Employees' Retirement System approved an additional $25 million venture capital commitment to the Hawaii Targeted Investment Program in late May 2020, escalating the pension fund's total deployment in the initiative to $75 million. The funding represents the third round of investment in HiTIP, a state-legislated program established in 2007 to generate private equity returns from venture capital activities rooted in Hawaii's local economy. Stafford Capital Partners manages the fund.
HiTIP operates as a targeted fund-of-funds vehicle, having made commitments to 21 separate investment funds that collectively have reviewed approximately 650 companies located in Hawaii for potential investment. The program explicitly targets venture and growth capital opportunities with portfolio concentration in the Hawaiian islands, distinguishing it from broadly diversified venture strategies.
The timing of this capital deployment reflects strategic positioning following COVID-19-induced economic disruption. ERS leadership indicated the pension system plans to substantially increase future commitments to participating local venture capital managers, with some expected to see funding levels double relative to prior forecasts. Elizabeth Burton, ERS Chief Investment Officer, emphasized the dual rationale: "We are in a fortunate position to finance innovation for the betterment of the people of Hawaii—we can put these assets to use to create solutions and returns simultaneously." This statement underscores the program's alignment with both fiduciary return objectives and economic development policy.
The broader context reflects growing recognition within institutional investment circles that pandemic-related supply chain vulnerabilities and travel restrictions have exposed economic concentration risk. The ERS deployment into locally-rooted venture capital represents a structural response to these systemic exposures while targeting portfolio diversification into regional innovation ecosystems, positioning the pension fund to capture venture returns while supporting Hawaii-based economic activity during recovery.
HiTIP operates as a targeted fund-of-funds vehicle, having made commitments to 21 separate investment funds that collectively have reviewed approximately 650 companies located in Hawaii for potential investment. The program explicitly targets venture and growth capital opportunities with portfolio concentration in the Hawaiian islands, distinguishing it from broadly diversified venture strategies.
The timing of this capital deployment reflects strategic positioning following COVID-19-induced economic disruption. ERS leadership indicated the pension system plans to substantially increase future commitments to participating local venture capital managers, with some expected to see funding levels double relative to prior forecasts. Elizabeth Burton, ERS Chief Investment Officer, emphasized the dual rationale: "We are in a fortunate position to finance innovation for the betterment of the people of Hawaii—we can put these assets to use to create solutions and returns simultaneously." This statement underscores the program's alignment with both fiduciary return objectives and economic development policy.
The broader context reflects growing recognition within institutional investment circles that pandemic-related supply chain vulnerabilities and travel restrictions have exposed economic concentration risk. The ERS deployment into locally-rooted venture capital represents a structural response to these systemic exposures while targeting portfolio diversification into regional innovation ecosystems, positioning the pension fund to capture venture returns while supporting Hawaii-based economic activity during recovery.
Go deeper than the headline
Research every firm in this story, track the ones that matter and get the daily briefing — free for 7 days.