The Hawaii Strategic Development Corporation (HSDC) is an agency of the State of Hawaii established in 1990 to promote economic development and economic diversification in Hawaii through a return driven investment program in partnership with private capital. HSDC is governed by HRS 211F and Chapter 127 of the Hawaii Administrative Rules.
Fund of Funds Investment Model
HSDC operates as a fund of funds, meaning HSDC does not invest directly into companies, but instead invests in venture capital partnerships. These investment partnerships make direct investments into Hawaii-based companies. The general partners of the venture capital partnerships, or fund managers, are private sector investors who pool funds from a number of investors, identify and invest in promising businesses, and manage the investments until an exit from the investment is achieved. In this manner, HSDC is able to leverage public funds with private capital and utilize the investment acumen of the private sector in selecting suitable investments.
HSDC seeks to invest in fund managers with experience in venture capital investing and that have a commitment to build a portfolio of Hawaii-based investments. Emphasis is given to investment opportunities that further technological innovation in Hawaii. HSDC is currently precluded by law from investing in retail businesses, housing construction, and the tourism sector.