Improving Alpha: Kristin Varela on the Human Impact of Pension Stewardship

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When running a pension plan for 150,000 active and retired members across the state of Hawaii, there are several factors that help achieve a 7% return. Governance, portfolio risk awareness, and culture all weigh on the minds of the investment team at the Employees’ Retirement System of the State of Hawaii.

In our last official recording of the 2025 Improving Alpha podcast season, we welcome Kristin Varela, Chief Investment Officer, Employees’ Retirement System of the State of Hawaii. Kristin and her team oversee the $25 billion plan, which has a mission of ensuring the financial dignity and multi-generational wealth for plan employees in this generation and for those in the future.

In this discussion with our host, Michael Oliver Weinberg, Kristin details her ‘fingerprint’ of principles and practices to prioritize steady and reliable results for the plan. Highlights include:

What initially excited Kristin about the CIO position at ERS of the State of Hawaii, and how her operational and cultural background moved her to the top of the candidate pool.

Why diversification is at the core of their investment beliefs, and how it enables her team to innovate alternative investment structures while adopting a proactive approach to asset management.

Looking at the value of complexity over time and understanding the opportunity costs involved in making capital decisions.

What were the steps in doubling down on fund managers that represented our core values and understood our mission versus those that were less innovative and aligned to the ERS mission?

How her past experience working with Jonathan Grabel (a past guest of the Improving Alpha Podcast) shaped her view of ESG and how she puts ESG to work, given the culture of Hawaii.

Why is food security such an interesting advancement for the pension plan, and what are some of the plays that Kristin and her team are navigating today in this space?

How AI is featuring in capital plans, whether it’s on the manager side and implementing systemic strategies or through investment plays like data centers or larger energy transition themes.

Disruption across private market investments and how Kristin keeps her plays in things like private credit and real assets at a high level of quality.

And more.

About Kristin Varela
Employees' Retirement System, State of Hawaii
Kristin Varela is the Chief Investment Officer for the Employees Retirement System of the State of Hawaii, a $23b pension plan, serving nearly 150,000 active and retired members across the state of Hawaii. She is responsible for the design and implementation of the Fund’s overall strategic goals, policies, and programs.

Kristin holds over 15 years of experience in the institutional investment industry and has served in both public and private sectors throughout her career. Prior to her time in Hawaii, Kristin served as the Deputy Chief Investment Officer and Interim Chief Investment Officer for the Public Employees Retirement Association of New Mexico. In these roles Kristin oversaw the delegated implementation of a $17b pension portfolio, ensuring the long-term solvency of the Plan, and serving over 90,000 active and retired members.

Kristin holds broad expertise in modeling, market analysis and manager-specific due diligence across various asset classes of public, private, and alternative markets. She specializes in risk-based asset allocation and portfolio management, real asset investment opportunities, innovative investment solutions, and prudent portfolio implementation through focused operational management.

Kristin holds a BBA in Finance from New Mexico Highlands University, and is a recognized industry leader, featured in Market Group’s “2024 Elite 100 CIOs” (2024), as well as a Chief Investment Officer “Industry Innovation Awards” finalist (2021), and a top “Forty-Under-Forty” next generation leader (2017). She is from a multi-generational family of local New Mexicans and is a proud mother to her 15-year-old son.

About Our Host: Michael Oliver Weinberg, CFA
For three decades Michael has invested directly at the security level and indirectly as an asset allocator in traditional and alternative asset classes. Most recently he was a Managing Director, Head of Alternative Alpha, on the Investment Committee, and a board member at APG, a Dutch pension provider. Previously he was the Chief Investment Officer at MOV37 and Protege Partners. Michael is also an Adjunct Professor of Economics and Finance at Columbia Business School, where he teaches Institutional Investing, an advanced MBA course that he created.