JAKARTA (TheInsiderStories)–Indonesian government will launch a private investment fund (PIF) this week to manage the funds owned by state-owned companies (SOEs).
The State-Owned Enterprises Ministry’s deputy for financial, survey, and consultant services Gatot Trihargo on Wednesday (27/06) said there will be a cooperation agreement between PIF shareholders on Thursday (28/06). PIF is formed by PT Bahana Kapital Investa, a subsidiary of PT Bahana Pembinaan Usaha (Persero), along with 27 other state-owned firms.
The establishment of the PIF has been agreed in the MOU signed on March 29, 2018 ,by Bahana Kapital Investa and Danareksa Capital along with 27 other SOEs.
President Director of Bahana Pembinaan Usaha Indonesia who is also the Commissioner of Bahana Kapital Investa Marciano H. Herman said PIF has prepared an initial investment in the form of securities and direct investment. He did not mention the project or investment product that PIF prepared.
PIF will invest in the equity or SOEs project for the medium term. PIF also will provide advisory roles for several national strategic projects.
Bahana Kapital Investa with Danareksa Capital will manage the funds owned by 8 insurance companies, such as Taspen, Askrindo, Asabri and 13 other pension funds such as pension funds of Bank Mandiri, BNI, BRI, BTN, Jasa Marga, and Telkom. The management of these funds will be under the supervision of Private Investment Funds.
PIF is expected to be able to provide additional funding to finance national strategic infrastructure. Marciano previously said Indonesia needs to build infrastructures to attract foreign investors to enter Indonesia and compete with the regional peers inSoutheast Asia.
Ministry of Finance estimated Indonesia needs funds of Rp4,796 trillion in 2015-2019 to improve the quality of infrastructures. This year, Indonesian government allocated Rp410.7 trillion in infrastructures spending, up 5.7 per cent from Rp388.3 trillion last year. This fund will be used to build 25 kilometers of toll roads, 865 kilometers of new roads, 8,695 of bridges, and 8 airports.
Meanwhile, Executive Director of the Association of Indonesian Pension Funds Bambang Sri Muljadi said the pension funds companies are cautious over the risk and return of the infrastructure-related instrument.