Hawaii ERS Blasts Past Its Benchmarks | Chief Investment Officer

The Hawaii Employees Retirement System (Hawaii ERS) beat its fiscal benchmark for the year ended June 30, bucking a trend as other public pension funds have missed their fiscal targets.

The $16.7 billion plan returned 5.83% in the period, 118 basis points above its 4.65% benchmark, confirmed Elizabeth Burton, Hawaii ERS’ chief investment officer.

“We are pleased to have outperformed our fund benchmark given the volatility over the past year, particularly toward the end of calendar year 2018 and earlier this spring,” she told CIO. “We are underwriting our port actively and proactively sourcing investment opportunities to prepare for future uncertainty and volatility.”

The fund also bested its three-, five-, and 10-year goals as well, returning 9.07%, 6.06%, and 9.2% over those timelines. Benchmarks for the trials were 8.08%, 5.3%, and 8.9%.

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Fiscal 2019 results came from a combination of gross and net returns, but the numbers for how well each individual asset class did were unavailable as of press time. Hawaii ERS’ target allocation is 68% broad growth portfolio, 16% crisis risk offset, with the remaining 16% to be split between principle protection and real return portfolios.

The Hawaii plan returned 7.85% for the previous fiscal year, largely from alternatives and low-volatility equities. Asset mixes during that period were 74.68% broad growth, 12.86% crisis risk offset, 8.27% principle protection, and 3% real return, according to the fund’s Q2 2018 report. The rest was in opportunities and other assets.

Burton came aboard the fund last October.

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Tags: Elizabeth Burton, Fiscal 2019, Hawaii, Hawaii Employees' Retirement System, Pension, Returns

The New York State Common Retirement Fund’s investment portfolio returned 3.38% for the first quarter of its fiscal year ending June 30, which raised its estimated value to $216.2 billion.

“The fund is off to a strong start this fiscal year,” New York State Comptroller Thomas DiNapoli said in a statement. “Markets have been volatile, however, warranting caution from investors. Longer term, we continue to take a conservative approach and closely examine our 7% target rate of return to determine if it is due for an adjustment as a matter of prudent fiscal management.”

As of June 30, the fund had 38.6% of its assets invested in publicly traded domestic equities, 24.8% in cash, bonds, and mortgages, 15.3% in international public equities, 9.2% in private equity, 8.5% in real estate and real assets, and 3.6% in absolute return strategies and opportunistic alternatives.

The fund paid out an estimated $2.89 billion in benefits during the quarter. According to Pew Charitable Trusts, New York is one of only eight states whose state pension funds have a funded level of at least 90%.

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DiNapoli also named interim CIO Anastasia Titarchuk as its permanent CIO. She has been the retirement system’s interim CIO since July 2018, when former CIO Vicki Fuller announced she was retiring.

“Anastasia Titarchuk’s leadership and talents as a skilled investor are reflected in the success of our state’s pension fund,” DiNapoli said. “She joined the state pension fund eight years ago and earned a reputation for delivering results, making her an outstanding candidate for CIO.”

Titarchuk was born in Moscow and moved to the US as a teenager. She graduated from Yale University with a B.S. in applied mathematics. Over the course of two decades, she worked in a variety of roles on Wall Street, including JP Morgan Chase, Barclays Capital/Lehman Brothers, and Bank of America.

“I am grateful for the trust Comptroller DiNapoli has placed in me over the years,” Titarchuk said in a statement. “Working with the fund’s staff has been a wonderful and enjoyable experience, and I’m excited to continue our partnership and grow the fund’s value in the months and years to come.”

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Tags: Anastasia Titarchuk, New York State Common Retirement Fund (NYCRF), Pension, Returns, Thomas P. DiNapoli