Hawaii Makes $25M Venture Capital Investment for Local Growth

The Hawaii Employees’ Retirement System (ERS) late last month committed an additional $25 million to a venture and growth capital fund that focuses specifically on island opportunities.

The third round of funding in the Hawaii Targeted Investment Program (HiTIP) brought total investment from the pension plan to $75 million, which was approved by the retirement system last month. The fund is managed by alternative asset specialist Stafford Capital Partners.

“The great thing about technology and innovation is that you can build it anywhere—so why not here at home?” Elizabeth Burton, CIO at ERS, said in a statement.

“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,” Burton added.

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Created by the state legislature in 2007, HiTIP is meant to generate private equity returns from investments in local venture capital firms, which have some or all of their portfolio companies based in Hawaii.

The state pension fund said local venture capital fund managers can expect to see an increase in commitments, with some doubling from what was previously forecast, as it looks to bolster local economic growth and production in the wake of the pandemic.

The travel bans and squelched supply chains resulting from the coronavirus have highlighted the vulnerabilities of an interconnected society to many in the financial sector. Last month, incoming World Bank Chief Economist Carmen Reinhart told Bloomberg TV that COVID-19 is the “last nail in the coffin of globalization.”

HiTIP has made commitments to 21 investment funds, which have reviewed about 650 companies located in Hawaii for investments.

Said Executive Director Thom Williams: “Anything we can do to support the state’s economic recovery while achieving our return expectations is beneficial not only to our members but to our fund as well.”