Danantara advances asset manager merger with 2.7 trillion rupiah deal

[JAKARTA] Indonesia’s sovereign wealth fund is advancing a plan to combine the asset management units of state-owned lenders to boost their regional competitiveness.

Danantara unit Danantara Asset Management signed deals on Apr 1 to acquire the investment management subsidiaries of Bank Mandiri, Bank Rakyat Indonesia, Bank Negara Indonesia and Permodalan Nasional Madani, subject to regulatory approvals, according to stock exchange filings published late on Thursday (Apr 2).

The wealth fund will acquire stakes for a total of 2.7 trillion rupiah (S$204 million), as it seeks to create “a champion with strong competitiveness”, according to the filings.

The filings confirm an earlier Bloomberg report that Danantara planned to combine the asset management firms it owns, aiming to build a larger player to compete locally and across the region, according to people familiar with the matter.

Danantara representatives did not respond to requests for comment over the weekend.

President Prabowo Subianto established Danantara last year in a bid to improve the efficiency of Indonesia’s powerful state-owned enterprises, reinvest the dividends and attract foreign capital into high-impact projects in South-east Asia’s largest economy.

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It has injected capital into the nation’s distressed flag carrier and leading steelmaker. BLOOMBERG