Indonesia's $1 trillion sovereign fund seeks strategic growth while avoiding past pitfalls

Indonesia's Danantara sovereign-wealth fund, created in 2025 with assets around $1 trillion, is trying to compress the learning curve of older funds by first walking, then running, then sprinting. CIO Pandu Sjahrir explained that the fund's dual mission is to restructure more than 1,000 largely unprofitable state-owned enterprises into dividend-paying companies that could eventually list publicly, and to make overseas investments that create jobs and export-oriented industries for Indonesia.

A recent transaction will give Danantara a stake in JBS's Australian meat-packing operations in exchange for JBS helping develop Indonesia's meat sector. The fund has hired Neuberger Berman to source deals, plans its first hedge-fund allocations later this year, and is placing executives on secondments with Wall Street firms to acquire know-how. Sjahrir said the fund will only pursue direct deals where it has expertise and will always partner with local players, citing joint ventures with partners in the UAE and China’s CIC. He acknowledged the risk of being perceived as "dumb money" but emphasized that delivering solid returns and strategic value will shift that perception.