The Employees’ Retirement System of the State of Hawaii (Hawaii ERS) provides retirement, disability, and survivor benefits to employees of the state, counties, and certain other public entities. With approximately $22 billion in assets under management as of mid-2024, Hawaii ERS serves over 125,000 active members and retirees.
Investment Strategy
Hawaii ERS maintains a diversified investment portfolio designed to achieve long-term returns sufficient to meet its actuarial obligations. The asset allocation spans public equities, fixed income, real estate, private equity, and other alternatives. The board of trustees sets strategic allocation targets, guided by asset-liability studies and input from investment consultants.
Public equities form the largest component of the portfolio, with exposure to domestic and international markets through both active and passive strategies. Fixed income provides stability and cash flow for ongoing benefit payments. Hawaii ERS has developed its alternatives program steadily, building private market exposure to enhance returns and diversify risk.
Private Markets Approach
Hawaii ERS’s private markets program includes allocations to private equity and real estate. The private equity portfolio spans buyout and growth equity strategies, with the system building relationships with established managers and maintaining diversification across vintage years, geographies, and sub-strategies.
Real estate represents a meaningful alternative allocation, with investments in core, value-add, and opportunistic strategies across property types. The system invests through commingled funds managed by experienced real estate operators.
Hawaii ERS’s unique geographic position does not limit its investment horizon. The system invests globally and evaluates managers from across the United States and international markets. The investment team conducts due diligence alongside external consultants, assessing performance track record, team stability, investment process, operational infrastructure, and alignment of interests.
The board of trustees provides governance oversight, reviewing and approving staff recommendations for new commitments. Hawaii ERS values transparency in fee structures and performance reporting, and expects its general partners to maintain regular communication and institutional-quality governance. The system has been focused on building a well-diversified private markets portfolio that complements its public market investments.
Frequently Asked Questions
How large is Hawaii ERS's private equity program?
Hawaii ERS allocates approximately 10% of total assets to private equity, representing roughly $2.2 billion in committed capital. The system invests across buyout and growth strategies with an emphasis on diversification and consistent net returns.
What commitment sizes does Hawaii ERS typically make?
Hawaii ERS typically makes commitments in the $20 million to $60 million range per fund. The system seeks managers with strong track records and institutional-quality operations who provide appropriate attention to LPs across the commitment spectrum.
How should managers engage with Hawaii ERS?
Hawaii ERS works with external investment consultants and maintains an internal investment team. The board of trustees sets investment policy and approves commitments. Managers should engage through consultant channels or contact the investment staff directly. Expect a thorough due diligence process covering performance, team, process, and operations.
