Danantara Indonesia: World’s 6th Largest Sovereign Wealth Fund

Indonesia has launched an ambitious new sovereign wealth fund, Danantara Indonesia, which is poised to transform the nation’s economic landscape. 

Officially established on February 24, 2025, Danantara manages $900 billion in assets, making it the world’s sixth-largest sovereign wealth fund. 

This strategic initiative aims to accelerate economic growth in Indonesia, enhance the competitiveness of state-owned enterprises (SOEs), and attract significant foreign investment in Indonesia. 

Below, we explore what Danantara Indonesia is, its goals, and why it’s exciting news for the country’s future.

What is Danantara Indonesia?

Definition and Purpose

Danantara Indonesia, formally known as the Daya Anagata Nusantara Investment Management Board, is Indonesia’s second sovereign wealth fund, following the Indonesia Investment Authority (INA) established in 2021. 

With an initial capital of $61 billion and a target to manage $982 billion by 2029, Danantara consolidates state assets, particularly SOEs, to drive national economic growth. 

With $900 billion in assets under management (AUM), Danantara is not just a financial powerhouse but also a symbol of Indonesia’s ambition to become a developed economy. 

Its establishment marks a significant shift in how Indonesia manages its state-owned enterprises and invests for the future.

Key Figures and Leadership

The strategic direction and operational management of Danantara Indonesia are entrusted to a group of leaders, blending world-renowned expertise with deep Indonesian experience.

• Advisory Board: Ray Dalio, founder of the world's largest hedge fund Bridgewater Associates; influential economist Jeffrey Sachs; former Prime Minister of Thailand Thaksin Shinawatra; former Credit Suisse APAC CEO Helman Sitohang; and F. Chapman Taylor.

• Steering Committee: Former Indonesian Presidents Joko Widodo and Susilo Bambang Yudhoyono.

• Executive Board: Chief Executive Officer (CEO) Rosan Roeslani (who also serves as Minister of Investment), Chief Operating Officer (COO) Dony Oskaria, and Chief Investment Officer (CIO) Pandu Sjahrir.

• Supervisory Board: Minister of SOEs Erick Thohir, senior economist Muliaman Hadad, Minister of Finance Sri Mulyani Indrawati, and various Coordinating Ministers, form the Supervisory Board.

What are its goals and investment focus?

Economic Growth Targets

Danantara Indonesia aims to boost Indonesia’s GDP growth from 5% to 8% by 2029, aligning with President Prabowo’s vision for a developed economy. 

The fund’s projected AUM of over $900 billion underscores its potential to impact Indonesia’s economy. By consolidating SOEs and managing their assets more efficiently, it is expected to enhance profitability and global competitiveness.

Strategic Investment Focus Areas

Danantara Indonesia targets high-growth sectors to enhance productivity and competitiveness:

• Downstream Natural Resources: Moving up the value chain by processing Indonesia's abundant raw materials like nickel and bauxite domestically, creating higher-value products and jobs.

• Renewable & Green Energy: Supporting Indonesia's transition towards sustainable energy sources, including geothermal and solar power.

• Digital Infrastructure & Technology: Investing in the backbone of the modern economy, including data centers and artificial intelligence (AI) development, to accelerate Indonesia's digital transformation.

• Food Security & Production: Strengthening national resilience by investing in enhanced food production, aquaculture, and related agricultural industries.

• Healthcare: Improving the quality and accessibility of healthcare services and infrastructure.

• Infrastructure: Continuing strategic investments in large-scale infrastructure projects.

Additionally, the fund aims to attract foreign investment through joint ventures and public-private partnerships in sectors like mining, telecommunications, and finance. 

A notable example is the $4 billion joint fund with the Qatar Investment Authority, focusing on investments in Indonesia’s downstream industries, renewables, and health facilities.

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How will it benefit Indonesia’s economy?

Consolidation of State Assets

Danantara Indonesia manages seven major SOEs, including Bank Mandiri, BRI, BNI, Pertamina, PLN, Telkom, and Mind ID, with total assets of approximately $900 billion. By streamlining operations, the fund enhances efficiency, optimizing state resources for national development.

Attraction of Foreign Investment

With its substantial size, Danantara Indonesia is likely to attract foreign investment in Indonesia. A $4 billion joint fund with the Qatar Investment Authority is an example, focusing on downstream industries, renewables, and healthcare.

Economic Growth and Job Creation

Investments in technology, infrastructure, and renewable energy in Indonesia, are expected to stimulate economic growth and create numerous jobs.

Technological Advancement

Aims to position Indonesia as a leader in innovation, enhancing productivity and opening new industries.

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How does it compare to other countries?

Sovereign wealth funds are increasingly vital in the global economy, with countries using them to manage reserves, stabilize economies, or invest in growth. 

Danantara joins major funds like Norway’s Government Pension Fund Global and China Investment Corporation. 

By establishing Danantara, Indonesia positions itself as a significant player in the global investment landscape, leveraging its resources for sustainable development.

Danantara is modeled after Singapore’s Temasek, which has successfully managed state assets and driven economic growth. By learning from such examples, Indonesia aims to replicate their success while addressing local challenges.

Conclusion

Danantara Indonesia has the potential to transform the country’s economy, drive sustainable growth, and improve the lives of its citizens. 

By consolidating state assets, attracting foreign investment, and focusing on sectors like technology and renewable energy, the fund is set to become a game-changer for Indonesia.

One thing is clear: Danantara is not just a fund; it’s a symbol of Indonesia’s ambition to become a global economic powerhouse.

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