Analysis: Danantara’s hedge fund gamble
Danantara’s plan to appoint hedge fund managers marks a potentially significant shift toward a more complex and higher-risk investment strategy. The move comes even as the state asset fund has yet to publish financial reports substantiating President Prabowo Subianto’s claims of stellar performance. It raises a fundamental question: Is Danantara’s investment strategy aligned with its long-term…
Danantara, the state asset fund, is considering a significant shift in its investment strategy by potentially hiring hedge fund managers. This plan, announced as early as next month, has raised questions about the alignment of such a move with the fund's long-term national mandate. President Prabowo Subianto has repeatedly praised Danantara's financial performance, claiming returns increased by 300 percent in fiscal year 2025 and revenue by 400 percent.
However, the publication of the fund's first-ever financial report, which will serve as a baseline for performance assessment, is still pending and undergoing pre-audit by the Supreme Audit Agency. The complexity of consolidating the financial statements of state-owned enterprises (SOEs) under Danantara is a contributing factor to the delay.
Adding hedge fund managers could introduce high-risk investment strategies, including short selling, leverage, and statistical arbitrage, which may generate returns even in market downturns. However, these strategies come with substantial costs, such as higher management and performance fees, and there's no guarantee of consistent outperformance.
Written by urgent.news from The Jakarta Post's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
