Indonesia’s sovereign wealth fund Danantara is preparing to make its first allocations to hedge funds later this year, with plans to appoint a small group of managers to oversee separately managed accounts as it broadens its exposure to alternative investments, according to a report by Bloomberg.
Chief Investment Officer Pandu Sjahrir said the fund expects to begin allocating capital as early as next month or during the next quarter. The initial phase is expected to involve three to four hedge fund managers, each overseeing separately managed accounts of at least $250 million, with average allocations expected to be around $500 million per manager.
Sjahrir said the fund favours a concentrated approach rather than spreading assets across a larger roster of firms.
Danantara, formally known as Daya Anagata Nusantara, was created by the Indonesian government to improve oversight of state-owned assets while directing investment into projects designed to support long-term economic growth. The organisation has previously established relationships with global asset managers and has already invested across traditional asset classes including equities and fixed income.
The planned hedge fund allocations represent the latest step in expanding the fund’s alternatives portfolio. According to Sjahrir, liquidity and manager reputation will be central considerations during the selection process, with peer feedback from other sovereign wealth funds playing an important role in due diligence.
The fund has previously stated that it oversees around $1 trillion in assets, largely through holdings in state-owned enterprises.
Alongside expanding its investment programme, Danantara is also evaluating the establishment of its first European office, with a decision on location expected within the next year. London is also being considered as the fund explores opportunities for its commodities-focused subsidiary, Danantara Sumberdaya Indonesia, particularly through the London Metal Exchange and the city’s concentration of commodities trading expertise.
Sjahrir said the fund is also seeking to increase exposure to higher-growth sectors, acknowledging that Danantara has so far maintained a relatively cautious position on artificial intelligence investments while concentrating on infrastructure and other real assets.
Danantara plans to deploy approximately $11bn during 2026 and has already invested roughly half that amount. The fund expects to publish its first public audit in the coming months.
Current investment initiatives include waste-to-energy projects in Indonesia, real estate developments in Mecca to serve Indonesian pilgrims, and opportunities linked to food security and critical minerals.
Beyond deploying capital overseas, Danantara is also promoting Indonesia as an attractive destination for international investors, arguing that the country’s relative political and geopolitical stability offers a compelling alternative for global capital seeking opportunities in emerging markets.
