Danantara Defends Investment Strategy Amid Finance Minister's Criticism

Response to Minister Purbaya's Concerns

Danantara, Indonesia's sovereign wealth fund, has addressed criticism from Finance Minister Purbaya Yudhi Sadewa regarding their decision to invest in government bonds (SBN). Managing Director of Treasury Ali Setiawan explained that this investment strategy is part of their risk management approach.

Global SWF Practices

Ali emphasized that allocating a portion of funds to low-risk instruments like SBN is a common practice among global sovereign wealth funds. He cited examples of major SWFs, such as Saudi Arabia's Public Investment Fund and Malaysia's Khazanah Nasional, which typically maintain 20-30% of their assets in liquid instruments, often government bonds.

Risk Management Strategy

The managing director clarified that Danantara cannot immediately invest all managed funds into high-risk projects. He stated, "We can't just put the money entrusted to us into high-risk projects." The allocation to SBN is part of their strategy to balance risk while waiting for suitable investment opportunities.

Industry Context

This approach is consistent with global SWF practices where liquidity management is crucial. Government bonds are considered safe and liquid assets, making them an essential component of their investment portfolios. Danantara's strategy aligns with international standards in sovereign wealth management.