INDONESIA Trends and Developments Contributed by: Alvin Suryohadiprojo and Dimas Nandaraditya, KARNA
Furthermore, investors should avoid placing excessive reliance on a founder’s charisma or vision alone. A more rigorous vetting process, including background checks, conflict of inter - est assessments and character references, is essential. On the other hand, founders must also build trust by maintaining transparent communi - cation with shareholders, embracing accounta - bility and avoiding blurred lines between person - al and company finances or decision-making. Strengthening governance structures is not just good practice – it is vital for sustainable growth and overall investor trust. Danantara The establishment of Danantara, a new sover - eign wealth fund and investment management institution formed by Indonesia’s newly inaugu - rated government in October 2024, is expected to reshape the country’s investment landscape. Danantara’s creation and operational mandate are embedded in the significant revision of the State-Owned Enterprises (SOEs) Law under Law
No 1 of 2025 (the “SOEs Law” ). Under this new legal framework, Danantara has been granted the authority to directly enhance and optimise the investments and operations of SOEs. One of the key changes brought about by Danan - tara’s establishment is the reallocation of SOE dividends. Previously channelled into the state treasury, these dividends will now be managed by Danantara to ensure more strategic and effi - cient utilisation. Danantara’s investment priorities span several critical sectors, including upstream food secu - rity, energy security, strategic real estate, and emerging industries such as AI computing and digital infrastructure (eg, data centres, connec - tivity and fibre optics). These sectors are already attracting significant interest from venture capi - tal (VC) firms, making it plausible for Danantara to co-invest or even take on a catalytic role in VC transactions – similar to the approach adopted by other sovereign wealth funds such as GIC, QIA and PIF.
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