Danantara considers forming $8bn asset manager in Indonesia

Core Viewpoint - Indonesia's newly established sovereign wealth fund Danantara is planning to create a national asset management company by merging the asset management divisions of several major state-owned banks to enhance competitiveness both domestically and regionally [1][2]. Group 1: Initiative Overview - Danantara aims to recruit advisers to support the merger of asset management units from PT Bank Rakyat Indonesia (BRI), PT Bank Mandiri, and PT Bank Negara Indonesia (BNI) [1][2]. - The asset management arms of BRI, Mandiri, and BNI managed nearly $8 billion in assets earlier this year [2]. - The transaction is expected to be completed by the first quarter of next year, although discussions are ongoing and no final decisions have been made [2]. Group 2: Challenges and Strategic Goals - Challenges include persuading minority shareholders to divest their stakes at reasonable prices and negotiating distribution agreements [3]. - Danantara's investments senior director indicated plans to utilize cash from state company dividends and an initial bond issuance for upcoming projects [4]. - The initiative aligns with Danantara's objective of revitalizing Indonesia's economic growth to levels comparable to those observed in the 1990s [4]. Group 3: Fund Size and Positioning - Danantara's assets are valued at approximately $1 trillion, positioning it among the largest sovereign wealth funds globally [5].