Indonesia's SWF prioritises good governance, open to investing in unicorns

Indonesia's SWF prioritises good governance, open to investing in unicorns

Indonesia Investment Authority Chief Risk Officer Marita Alisjahbana

Indonesia Investment Authority (INA), the country’s newly-established sovereign wealth fund, is prioritising a good governance framework at the core of its investment strategy, a top executive said.

INA’s chief risk officer Marita Alisjahbana told DealStreetAsia, in an interview, “everything needs to go through a real process. There are many [targets], of course, to get deals done but we need to do it in such a way that we have good governance [framework] and risk-adjusted returns”.

Launched in February this year, INA has made one investment so far and is currently processing as many as  50 deals.

INA announced its participation in telecom firm Mitratel’s initial public offering that raised $1.3 billion in November, the second-biggest IPO in the country this year. While INA did not disclose the sum it invested in the IPO, it was reported to be in the region of $500-$800 million.

Nearing its first anniversary, INA has drawn flak for the slow pace of deployment that could hamper President Joko Widodo’s plan to bring in investments to help the government narrow its budget deficit. Alisjahbana, however, is satisfied with the fund’s progress as it puts prudential practices first.

While Southeast Asia’s latest sovereign wealth fund was formed with a mandate to bring in investments into the country to finance much-needed infrastructure projects, INA is open to investing in a wider array of sectors from transportation to healthcare to technology. “I don’t think we’re restricting ourselves to infrastructure,” Alisjahbana said.

Beyond infrastructure, INA may also be eyeing the country’s growing tech startup ecosystem to make investment bets. Alisjahbana said the SWF is “open to backing unicorns” but declined to elaborate further.

Indonesia is home to 13 unicorns of which six have earned the tag this year including fintech startup Kredivo, payment gateway Xendit and wealth-tech startup Ajaib. The country is expecting several more to hit the $1-billion valuation mark including over-the-top platform Vidio, beauty startup Social Bella, and coffee chain Janji Jiwa, among others.

Edited excerpts of the interview:-

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