Indonesia's sovereign wealth fund, Danantara, is set to begin allocating funds to hedge fund managers in the coming months, marking a significant step in diversifying its portfolio. Chief Investment Officer Pandu Sjahrir indicated in an interview that the fund aims to establish several separately managed accounts, each valued at a minimum of $250 million. On average, Danantara anticipates committing around $500 million per manager, initially partnering with three to four managers to maintain a concentrated portfolio.
Established in 2025 by President Prabowo Subianto, Danantara, officially known as Daya Anagata Nusantara, aims to enhance state asset management and channel capital into projects designed to boost Indonesia's economic growth. The fund currently manages approximately $1 trillion in assets, primarily derived from state-owned companies. While Danantara has already engaged with asset managers like General Atlantic and invests in equities and fixed income, it is now expanding into alternative investments. Sjahrir emphasized that liquidity and the reputation of the managers will be critical factors in the allocation decisions, and Neuberger Berman has been hired to assist in manager selection and deal sourcing.
Danantara's investment strategy extends beyond hedge funds. The fund plans to deploy about 200 trillion rupiah ($11 billion) this year, having already achieved approximately 50% of this target, albeit slightly behind schedule. It is also exploring opportunities in waste-to-energy projects in Indonesia, property development in Mecca, Saudi Arabia, to cater to Indonesian pilgrims, and investments in food security and critical minerals. Additionally, Danantara is looking to open an office in Europe within the next 12 months and is exploring the London Metal Exchange for its new unit, Danantara Sumberdaya Indonesia, which will oversee exports of key Indonesian commodities such as palm oil, coal, and ferroalloys. The fund is also examining research and development sectors, including AI, in the UK, particularly around Oxford and Cambridge.
