Can the newest sovereign wealth fund avoid others’ mistakes?

Indonesia's newly formed sovereign wealth fund, Danantara, aims to learn from the mistakes of other government investment vehicles, while simultaneously restructuring over 1,000 state-owned enterprises and investing internationally. Founded in 2025, Danantara's $1 trillion portfolio is comparable in size to Saudi Arabia's Public Investment Fund.

The fund's chief investment officer, Pandu Sjahrir, explains that the organization is in the early stages of its growth trajectory, likening it to the "walk, run, sprint" progression. Sjahrir emphasizes the importance of partnering with global asset managers and companies, while also benefiting from their expertise to improve Indonesia's domestic markets.

Western investors are interested in accessing Indonesia's financial markets, which have been off-limits until now. In return for investing, Danantara seeks to improve its stock market and gain access to knowledge and experience from Western firms. To foster these relationships, Danantara sends some of its executives to secondments with Wall Street firms, and it also trains its own staff with selected fund managers.

Sjahrir acknowledges that perception is crucial, as past Gulf sovereign wealth funds faced criticism for not providing strategic value to their Western partners.