Danantara to Increase Investments in the Middle East - BCA Securities

Indonesia’s sovereign wealth fund, Danantara, plans to increase its investments in the Middle East despite the war in Iran, and also intends to allocate more funds this year to energy security, said investment chief Pandu Sjahrir on Wednesday (15 April). “We will continue to invest in the Middle East, especially in Mecca because it’s truly remarkable how they have opened up Saudi Arabia to us for investment,” Pandu said in an interview with Bloomberg TV on the sidelines of a conference in Hong Kong. “So we will increase those efforts. Because I think in the long term, Mecca will always be Mecca, it will always be a very good investment.” Danantara, which describes itself as the world’s seventh-largest sovereign wealth fund by total assets, last year purchased land and a hotel in the Saudi city. That purchase was one of its first foreign investments. The fund has also injected capital into Indonesian state-owned companies and appointed other asset managers to make some investments on its behalf. The one-year-old fund plans to invest around US$14 billion in 2026 across various asset classes, according to Pandu. “Given the current situation, there will likely be a tendency towards energy security,” he said, adding that more energy is also needed to support artificial intelligence growth and digital infrastructure. There will also be “a tendency towards critical minerals,” he said. He stated that the ongoing Middle East conflict is likely to have long-term impacts. “The impact, even if we end the war this week or next, you will still feel it for the next nine or 12 months,” he said. Pandu also provided an update on Danantara’s partnerships with other sovereign wealth funds. He said the Indonesian fund is working with China Investment Corp “to bring partnership capital to invest in common partners, fund managers” which in turn can benefit Indonesia. “We are each committing half a billion in capital,” he said. Pandu said Danantara also has a similar agreement with the Qatar Investment Authority in the property sector in Indonesia. Last June, the Indonesian fund said it would collaborate with Russia’s Direct Investment Fund to launch a joint investment platform and promote economic cooperation between the two countries, but so far little has materialised. Indonesian President Prabowo Subianto recently visited Moscow and discussed economic issues and energy security with Russian President Vladimir Putin. “With this new world order, I think that also changes the dynamics with Russia,” said Pandu, adding that there are “things that need to be followed up” and “we just need more deals to happen.”