Hawaii Employees' Retirement System, Honolulu, committed up to $50 million each to ISQ Global Infrastructure Fund II and CBRE Strategic Partners U.S. Value 8, said Vijoy Chattergy, chief investment officer of the $15.4 billion pension plan.
I Squared Capital's latest infrastructure fund is expected to make middle-market investments in the energy, utilities and transportation sectors. Hawaii had committed $20 million to I Squared's first fund.
Pension fund officials at the Aug. 14 board meeting also committed to CBRE Global Investors' latest value-added and opportunistic real estate fund. Hawaii had invested in the last three funds in the CBRE Strategic Partners U.S. Value fund series, he said.
Separately, the pension plan earned a gross 2.5% return for the quarter and 13.4% for the year ended June 30. The fiscal-year return surpassed the pension fund's benchmark of 11.9%. Net returns were not provided.
The best-performing asset class was broad growth, which includes public and private equity, real estate and equities, with a 17.1% return. Public equities posted a 22% return. The worst-performing asset class was principle protection, which includes sovereign bonds and treasury bonds, at 1.9%. Hawaii has a 76% target to broad growth and 9% to principle protection. Hawaii's new crisis risk offset class, which includes long bonds, systematic trend and alternative risk premium, was down 2.4% for the quarter. The crisis risk offset asset class, which has been around for less than a year, has a 10% allocation target. The remaining 5% of the portfolio is allocated to real return; a fiscal-year return was not provided.
"We feel (the crisis risk offset portfolio) is doing what we wanted it to do. We understood that in strong equity markets it could not be additive. It should be an offset," Mr. Chattergy said.
The total portfolio's gross return for the three years ended June 30 was 5.5%; five years, 9.2%, and 10 years, 5.3%, surpassing the benchmark return for all periods.
