Danantara Considers Forming $8bn Asset Manager in Indonesia
Danantara is on the verge of establishing a significant asset management company designed to enhance its competitive edge both locally and in the broader region. This move, highlighted by Bloomberg, involves merging the asset management divisions of key state-owned banks, including PT Bank Rakyat Indonesia (BRI), PT Bank Mandiri, and PT Bank Negara Indonesia (BNI).
Strategic Goals for the New Asset Manager
With an impressive combined asset base nearing $8 billion from these banks, Danantara aims to consolidate resources and expertise. They intend to seek advisers who will guide the initiative, potentially expanding to include additional banks in the future. The objective is clear: create a robust asset manager that resonates within Indonesia’s rapidly evolving financial landscape.
The first quarter of next year is earmarked for finalizing this initiative, although discussions are ongoing and no definitive agreements have been reached. Major hurdles lie ahead, particularly in convincing minority shareholders to divest their stakes at reasonable valuations and negotiating distribution agreements.
Danantara’s Broader Vision
Established this year, Danantara is tasked with managing Indonesia’s state enterprises, strategically investing their dividends while attracting external investments into critical national projects. As noted by Sunata Tjiterosampurno, senior director of investments, Danantara plans to utilize funds from state dividends and an initial bond issuance to finance upcoming projects.
The fund has also signaled its intentions to tap into the local stock market and earmarked resources for bond markets. This initiative is a critical component of Danantara’s broader goal to rejuvenate Indonesia’s economic growth, aiming to reach levels reminiscent of the vibrant 1990s.
With estimated assets valued at around $1 trillion, Danantara is poised to emerge as one of the largest sovereign wealth funds globally, reinforcing Indonesia’s position in the international financial arena.