Indonesian wealth fund to offer multiple investments to raise $15bn
Indonesia’s new sovereign wealth fund will try to raise $15bn (£11.3bn) through specific industry funds as it tries to boost the flow of money into the country, according to finance minister Sri Mulyani.
Sri Mulyani told Reuters that investors “will have the flexibility to invest in many portfolios”. These sectoral funds would come under a “master fund” in which groups could also invest, she said.
It comes as Indonesia tries to catapult itself to be a top five economy in 25 years’ time. Despite the country’s advantages, such as its situation in a fast-growing region, some investors have been put off by poor infrastructure and shallow capital markets.
The new sovereign wealth fund hopes to address these problems. Economic ministers were told on Friday that it will attract investors with investments of various risks, returns and lengths. The fund will be called the Indonesia Investment Authority.
However, investors have been made wary of novel wealth funds after the wide scale corruption of Malaysia’s 1MDB.
Reuters reported that Indonesia’s fund will be managed by experienced professionals. It will also have a supervisory board of ministers. Sri Mulyani said it was key that the fund is “credible”.
More details about the exact structure of the fund will be key for investors, and are set to be released in due course.