Hawaii State of Mind with Elizabeth Burton, Episode #54

Today’s guest on the Mitlin Money Mindset™ is Elizabeth Burton, the Chief Investment Officer of the Employees’ Retirement System for the State of Hawaii. Elizabeth oversees $19 billion in pension fund assets and is also on the Board of Directors of the Chartered Alternative Investment Association. She was named one of Chief Investment Officer Magazine’s Top-40-Under-40. Additionally, Elizabeth received the Industry Innovation Award for plans under $20 billion by Chief Investment Officer Magazine and was listed in the Power 100 in 2019. In 2020 she was added to the list of top 1% of institutional investors by The Trusted Insight and has made several appearances on CNBC in order to address the state of the markets since the start of the pandemic. Listen in, as Ms. Elizabeth Burton shares her insights into what it means to manage a state pension fund and how institutional investors view the markets and assets.

You will want to hear this episode if you are interested in…

  • Elizabeth’s path to becoming the CIO of ERS for Hawaii [2:43]
  • As fiduciary for a state pension system what are your goals for the fund? [7:13]
  • The approach to looking out into the future and building this allocation [10:28]
  • What is the pandemic’s effect on the state’s fund going forward? [14:16]
  • Do pension funds have more access to non-traditional assets than individuals [19:43]
  • Can the ordinary retail or accredited investor enter and invest in private equity? [24:45]
  • Is crypto part of the overall strategy for the pension system? [26:55]
  • The biggest change as a result of the move to Hawaii and what it’s like [31:29]
  • What Elizabeth did today that put her in the right mindset for success? [33:13]

Return of the money > return on the money

What kind of goals are set for a state pension system? Well as the CIO, Elizabeth is a fiduciary for the Hawaii State Pension System and says one thing to point about public pensions is they are usually run by a board and it is mostly the goals of the board that she executes on. The asset allocation in Hawaii is very different from Maryland because the board has determined very different goals. In Hawaii, there is a different plan primarily because it’s half the size of Maryland, but also because it’s only 55% funded. This means the investment returns and the stability of the investment returns matter much more to secure retirement benefits out in the future.

Elizabeth wouldn’t call their plan super conservative but as a fiduciary, it is way more important for her to protect assets than to try to knock the cover off the ball and hit the lights out in terms of investing so she says that’s the primary difference from a personal investor where you’re focused on what your ROI is and your return. She’s just trying to mitigate the downside so that there is longevity.

Access to non-traditional assets

There’s this perception by the average investor that institutions, pension funds, potentially have access to investments that aren’t available to everybody. Does Elizabeth’s pension fund—or pension funds in general—have access to more non-traditional assets than individuals do?

Elizabeth says probably so. Part of that is their investment horizon. One of their strengths is that they can invest really, really long-term. In most private market investments you’re locking up your capital for 10 to 12 years, maybe even longer with extensions. Elizabeth believes people think it’s easy for them to get access to all sorts of private market investments but it’s not. It’s very competitive. While they’re s $20 billion fund, there are funds like Calstrs CalPERS out there that are huge with hundreds of billions of dollars, and they are all over the world, Canadian funds, Australian funds, European funds, so it can actually be hard getting access to the best.

The Crypto Craze

Crypto seems to be very in your face in recent years. What are Elizabeth’s feelings on it and is it part of her strategy for the pension system?

Elizabeth explains she has very limited exposure working with crypto but she does have some experience with blockchain because she used to consult for a bank on their blockchain strategy about a decade ago, before it was a household name. In terms of cryptocurrencies, it’s interesting because what is it really? Is it a substitute for gold? Is it a speculative asset? One of the problems with cryptocurrencies is that many people define what it is differently and that’s a huge impediment from being widely accepted as a currency at the current moment. Sure you can use it to pay for a latte but can you pay for a house? Elizabeth thinks that it has a long way to go in terms of being a stable asset for their portfolio.

Connect with Elizabeth Burton


Elizabeth Burton, MBA, CAIA, Chief Investment Officer –

Elizabeth Burton is the Chief Investment Officer of the Employees’ Retirement System of the State of Hawaii (“HIERS”), where she oversees $19 billion in pension fund assets. Ms. Burton is also on the Board of Directors of the Chartered Alternative Investment Association (CAIA).

Prior to joining HIERS, Ms. Burton served as Managing Director of the Quantitative Strategies Group at the Maryland State Retirement Agency. In this role, Ms. Burton was responsible for the $4.5B Absolute Return Portfolio and for risk management oversight of the $55B Plan. Ms. Burton joined the Agency in July 2016.

Previously, Ms. Burton owned William Street Advisory—a strategic advisory practice which she founded in 2013. Prior to that role, Ms. Burton was a Senior Economist and Expert Witness with Criterion Economics. Prior to that role, Ms. Burton was a Consultant at First Annapolis where she worked on M&A transactions and consulting the payments industry. Previous positions include: Co-Portfolio and Quantitative Risk Analyst with a South Africa-based fund of hedge funds, Trader (fixed income securities) for a risk management firm, and Portfolio Management Associate with a quant-focused fund of hedge funds.

Ms. Burton received her Bachelor’s degree in Political Science and French, cum laude, from Washington and Lee University, and her MBA in Finance, Econometrics & Statistics from the University of Chicago Booth School of Business. She is on the board of a private residential real estate investment trust and a Trustee of The Hill School, a private boarding school. She is also a CAIA charter holder. Ms. Burton was named one of Chief Investment Officer Magazine’s Top-40-Under-40 in June 2017. In 2019 Ms. Burton received the Industry Innovation Award for <$20B plan by Chief Investment Officer Magazine and was listed in the Power 100 in 2019. In 2020 she was added to the list of top 1% of institutional investors by The Trusted Insight. She has made several appearances on CNBC in 2020 to address the state of the markets in COVID.

A diversified portfolio does not assure a profit or protect against loss in a declining market. With respect to alternative investments in general, you should be aware that returns from some alternative investments can be volatile and you may lose all or a portion of your investment. Additional risks are associated with international investing, such as currency fluctuations, political and economic stability, and differences in accounting standards.

Guests on the Mitlin Money Mindset Show are not affiliated with CWM, LLC, and opinions expressed herein may not be representative of CWM, LLC. CWM, LLC is not responsible for the guest’s content linked on this site.

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