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Kolette Lim

As sovereign wealth funds are increasingly deployed as geopolitical tools, Indonesia’s new state-backed vehicle is setting itself apart by operating with transparency and professional discipline, according to one of its top executives.
Pandu Sjahrir, chief investment officer of Danantara Indonesia, said the sovereign wealth fund was being run for profit rather than politics, even as governments around the world tapped heavily into such stashes to pursue strategic goals.
“In the new geopolitical world, every country and every leader uses sovereign wealth funds as a geopolitical tool,” Pandu said at the South China Morning Post’s China Conference: Southeast Asia 2026 in Jakarta on Tuesday.
“We cannot have politicians in the company. It has to be professional,” he said, adding that the fund had laid rules stipulating that it had to be run for profit.
He acknowledged funds often had to balance national interests while meeting international transparency and governance standards.

“Given where Danantara is today, there’s a lot of pull for us to do things that may be important for the country, but not yet profitable as a project,” he said. “The art of saying no is super important.”
Danantara, the country’s second sovereign wealth fund, oversees over 1,000 companies and a trillion dollars’ worth of assets. It was hailed by President Prabowo Subianto as a vehicle to lift Indonesia’s economic growth from 5 per cent to 8 per cent during his term.
At first, the fund, which received US$20 billion in initial funding, sparked concerns about transparency and the risk of mismanagement, a perception Pandu said he understood.
“At the time, the market didn’t really welcome the idea of Danantara,” he said.
But efforts to streamline costs, recruit global talent and showcase transparency is closing the “trust deficit” and alleviating doubts, he said.
The fund has also reduced spending by cutting bonuses from the commissioner level, saving US$800 million annually. Further cuts are expected as the fund moves to streamline over 1,000 state-owned enterprises to over 200 – a move that Prabowo has requested to be done by the end of the year, according to Pandu.


According to Pandu, out of 1,040 companies, 52 per cent were unprofitable. Almost all the dividends – 95 per cent – were reaped from just 12 firms.
“So within this year, you’re going to see a lot of mergers between the companies in Danantara. Some may have to be closed, some may have to be sold, some may find partners … I think that will save a lot of capital,” he said.
Last March’s revelation of the line-up of Danantara’s asset managers, which included “the best superstars”, increased the stock market by about 5 per cent, Pandu said.
But human capital continues to be the biggest challenge and the mission to recruit global talents is still ongoing. Prabowo has approved the recruitment of a foreigner for the chief executive officer post. “This is really to jump-start, because for us, Danantara is a human capital bank,” Pandu said.
No ‘situationships’
Transparency and agility were crucial in operating the fund, said Pandu, who shared that he had been in close touch with regulators.
“At the end we’re investors in the stock market, both here in Indonesia and outside. We have to be better and I always say, if we don’t change, somebody else will change us,” he said.
The country’s stock market received a reality check last month, when MSCI said that it would reclassify Indonesia from an emerging to a frontier market if it failed to see improvements, having previously cited a lack of transparency in shareholding structures and concerns over coordinated trading actions.
This was followed by Moody’s cutting of Indonesia’s credit rating outlook from stable to negative last Thursday, citing reduced predictability in policymaking.

“I think what MSCI did is like a cold plunge,” said Pandu. “We need to understand the repercussions if you don’t communicate and adjust the market. Don’t blame others. Don’t hate the players, hate the game.”
Pandu said the fund sought to model itself on Asian counterparts Hong Kong and India to help Indonesia improve its capital markets. Indonesia previously announced that Danantara could potentially be involved as a strategic investor as part of measures to stabilise markets.
“We’ll probably look at Hong Kong as a good example,” he said, pointing to how the financial hub claims the world’s top spot for IPOs. “We’ll look at what India did to transform its capital market. And we’re just going to copy with pride. All the good things that have been done, we’ll do it.”
Danantara is reportedly targeting investment placements of up to US$14 billion this year, and half of the fund’s assets would be invested overseas. The fund was especially keen to finance Chinese sectors such as advanced manufacturing, electric vehicles, healthcare and agentic artificial intelligence, Pandu said.
As you perform and teach our young Indonesians to be great fund managers, we’ll give you more capital
Pandu Sjahrir, Danantara chief investment officer
But these companies would have to benefit Indonesia and its people through the transfer of knowledge and technology.
“We would love to partner and invest in your business, but in return, can you come and establish your business in Indonesia and bring your knowledge here? … If we invest in you, we need to have an Indonesian work there with you,” he said.
Addressing over 500 participants, including some 30 Chinese companies, Pandu said: “I don’t want a ‘situationship’, I only want a relationship. Hopefully that’s clear, and we’re willing to double down – as you perform and teach our young Indonesians to be great fund managers, we’ll give you more capital.”


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Chief Investment Officer Pandu Sjahrir is committed to operating the fund with transparency – even if he has to say no to the government


Chief Investment Officer Pandu Sjahrir is committed to operating the fund with transparency – even if he has to say no to the government.


Danantara Indonesia chief vows to keep politics out of trillion-dollar fund

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Chief Investment Officer Pandu Sjahrir is committed to operating the fund with transparency – even if he has to say no to the government

Chief Investment Officer Pandu Sjahrir is committed to operating the fund with transparency – even if he has to say no to the government