Indonesia’s Danantara weighs creating 133-trillion-rupiah asset manager: sources
The sovereign wealth fund wants to build a bigger asset manager to compete locally and across the region
[JAKARTA] Danantara, Indonesia’s nascent sovereign wealth fund, is mulling plans to create a national asset manager by combining units from some of the country’s biggest state-owned banks, according to people familiar with the matter.
Danantara seeks to hire advisers to help set up a new firm that will combine the asset managers of Bank Rakyat Indonesia (BRI), Bank Mandiri and Bank Negara Indonesia (BNI), the people said, asking not to be identified because the deliberations are private.
Danantara wants to build a bigger asset manager to compete locally and across the region, the people said, adding that other banks’ asset managers could be included in the plan as well.
The asset management arms of BRI, Mandiri and BNI had nearly 133 trillion rupiah (S$10.4 billion) in assets under management earlier this year, according to the latest data available from the banks’ statements.
Danantara may seek to finalise a transaction as soon as in the first quarter of next year, one of the people said. Considerations are ongoing and no final decisions have been made, the people said.
Representatives for Danantara and the banks did not immediately provide a comment.
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Hurdles to the plan include convincing minority shareholders of the banks to sell their asset management businesses at a fair value, as well as negotiating distribution agreements, the people said. Considerations are ongoing and no final decisions have been made, they said.
Danantara, which reports to President Prabowo Subianto, was established this year to manage Indonesia’s network of state enterprises, invest their dividends and draw outside investment into projects of strategic national importance.
Danantara’s investment arm should be able to deploy part of its cash from state company dividends and a maiden bond issuance in the coming months towards projects, Sunata Tjiterosampurno, senior director for investments at the fund, said earlier this month.
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Danantara also recently said it plans to invest in the local stock market, and that it has allocated investments to bond markets.
The wealth initiative is central to the president’s goal of reviving growth in South-east Asia’s largest economy to levels last seen in the 1990s.
Danantara has said its assets are worth about US$1 trillion, reflecting holdings of state-owned firms across sectors from energy to banking. That amount would place it among the world’s largest sovereign wealth funds by portfolio size. BLOOMBERG
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