Bridging the Bay of Bengal: Danantara Courts India in Sovereign Wealth Drive

JAKARTA, Investortrust.id — Amid the "heart and history" of a centuries-old friendship, Ali Setiawan, Managing Director of Treasury at Danantara, stood before Indian business leaders to pitch a new era of commercial pragmatism. Addressing the “India Night 2026” forum, he signaled that Indonesia’s new sovereign wealth fund is looking toward New Delhi as both a model for market reform and a primary partner for strategic co-investment, declaring 2026 the “year of deployment” for the fund’s capital.

Ali outlined the fund’s roadmap at the “India Night 2026” forum hosted by the Indian Embassy in Jakarta on Wednesday, Jan 28, 2026, describing the year as a pivotal moment for Indonesia’s economy. “If we look at 2026, we call it the year of deployment for us,” Ali told an audience of international investors and diplomats.

A Dual Mandate for Reform

Established last year to report directly to the President, Danantara operates through two distinct sub-holding companies. The first, Danantara Asset Management (DAM), is tasked with the monumental restructuring of more than 1,000 state-owned enterprises (SOEs). Ali noted that nearly half of these companies are not currently profitable, often serving as vehicles for non-core activities.

To streamline these operations, Danantara is consolidating assets into focused holding companies—a move that includes grouping 160 hotels and 60 hospitals into single entities to allow parent SOEs to focus on their primary business.

The second arm, Danantara Investment Management (DIM), is a "completely new" entity built from the ground up to handle strategic and private deals. Ali emphasized that while the fund is mandated to pursue high-impact national projects, it remains a commercial entity. "We look at good healthy commercial IRR return projects," he explained, noting that the fund targets eight key sectors, including downstreaming, healthcare, digital infrastructure, and renewable energy.

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Addressing Governance and the "1MDB" Shadow

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Aware of the scrutiny surrounding sovereign wealth funds in Southeast Asia, Ali was blunt about the fund’s governance standards, explicitly seeking to distance Danantara from the scandals that plagued Malaysia’s 1MDB.

To build credibility, he recruited top Indonesian talent from global financial hubs, including professionals from Goldman Sachs and Bridgewater in New York. "I hired all these professionals from a very reputable organization... Our intention is just not to move fast," he said, adding that the last several months were spent writing rigorous standard operating procedures (SOPs), investment mandates, and conflict-of-interest policies from scratch.

He reassured investors that no single person can unilaterally approve a deal. Every investment must "cook through the IC [Investment Committee] charter" and pass multiple risk governance forums.

Learning from the Indian Model

Ali was candid in his assessment of the two nations' financial trajectories. He lauded the development of the Indian market, noting it had grown to command nearly 20% weighting in global indices. He suggested Indonesia could learn from the Indian experience in deepening its financial markets and improving transparency.

The interaction turned candid when investors raised concerns regarding the recent volatility in the Indonesia Stock Exchange (BEI) and decisions by index provider MSCI. Ali, who previously served as the chairman of the financial markets committee, characterized the current liquidity and volume in the equity market as "concerning".

He specifically pointed to the dominance of "conglo stocks" (affiliated conglomerate stocks) and "penny stocks," which he estimated account for nearly 40% of market activity. "A lot of these transactions is non-fundamental basically flows," he remarked, calling for reforms from regulators to improve transparency and shareholding structures to win back international index providers.

A Strategy of "Copy with Pride"

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For Indian firms specializing in high-tech manufacturing and digital infrastructure, Mr. Sutyawan offered an unusual invitation for collaboration. He emphasized that Danantara is willing to act as a minority partner if the deal includes technology transfers.

“We are not ashamed to say we can copy with pride,” he told the forum, explaining that if partners have the best technology, Danantara is eager to co-invest to bring those capabilities to Indonesia

In a notable comment on the future of Indonesian manufacturing, he stated that the fund is interested in investing in companies that agree to technology transfers. "We are not ashamed to say we can copy with pride," he said. "If we think our partners have the best technology... we are more than happy to work with them".

As Danantara prepares for its 2026 deployment, Ali’s message to the forum was one of cautious but firm optimism. Acknowledging the "pressure" of his role, he told the audience: "Don't worry, continue to invest in Indonesia because we are too good to be ignored