Indonesia’s $1tn fund wants industrial capabilities as well as investment returns

Indonesia’s Danantara values its holdings at roughly $1tn, but that figure describes assets, not a trillion dollars of immediately spendable cash. Its chief investment officer, Pandu Sjahrir, tells Semafor that the mandate includes restructuring more than 1,000 state-owned enterprises, around half unprofitable.

The second task is international investment that brings jobs, industries and export capacity home. A deal involving JBS’s Australian business illustrates the exchange: investment overseas is paired with help developing Indonesia’s domestic meat industry.

The fund has hired Neuberger Berman to help select investments and managers and is sending executives to Wall Street firms to learn. Corruption and political influence remain concerns for prospective partners.

Sovereign investment is being used as industrial policy. The test is whether foreign deals actually transfer useful capabilities and improve state-company performance, rather than merely producing impressive asset totals, prestigious partnerships or fees for outside managers.