Indonesia’s Danantara Fund Unveils Star-Studded Leadership Amid Governance Concerns

Jakarta – Indonesia’s newly established sovereign wealth fund, Danantara Indonesia, has rolled out an impressive roster of global and local figures to lead its ambitious financial venture. Announced on March 24, 2025, the leadership team includes high-profile names such as hedge fund icon Ray Dalio, economist Jeffrey Sachs, and former Thai Prime Minister Thaksin Shinawatra. However, while the lineup has been billed as a “dream team” by some, analysts warn that the fund’s success will depend on its ability to navigate political interference and governance challenges rather than the star power of its board.

A Bold Vision for Indonesia’s Economic Future

Danantara Indonesia, launched under the administration of President Prabowo Subianto, aims to bolster the nation’s economic standing by consolidating state-owned enterprises (SOEs) and managing investment funds, including dividends from these entities. The fund is structured with an operational holding to oversee SOEs and a separate investment holding focused on strategic sectors such as food security, energy security, downstream industries, and digital infrastructure.

At the helm is Investment Minister Rosan Roeslani, appointed as CEO by President Prabowo in February 2025. Joining him are Deputy SOEs Minister Dony Oskaria as chief operating officer and entrepreneur Pandu Sjahrir, nephew of National Economic Council chairman Luhut Pandjaitan, as chief investment officer. The supervisory board includes SOEs Minister Erick Thohir and former Financial Services Authority head Muliaman Hadad, while former presidents Joko “Jokowi” Widodo and Susilo Bambang Yudhoyono sit on the steering committee.

The advisory board, featuring international heavyweights like Dalio, Sachs, and Shinawatra, alongside former Credit Suisse CEO Helman Sitohang and Capital Group’s Chapman Taylor, appears designed to lend global credibility to the fund. Additionally, Danantara has appointed 10 directors with backgrounds from the World Bank, International Finance Corporation, and domestic financial institutions such as Bank Mandiri and the Indonesia Investment Authority (INA).

“We acknowledge that finding the right people, who have proven expertise while maintaining a clean and clear track record, is not an easy task” said Rosan Roeslani during the announcement in Jakarta on March 24, 2025, as reported by The Jakarta Post. He emphasized that the selection process involved rigorous interviews and assessments with assistance from global headhunters like Egon Zehnder.

Mixed Signals on Strategy and Independence

Despite the impressive lineup, Danantara’s role and investment strategy remain unclear, with conflicting messages from government officials. President Prabowo’s top advisor, Hashim Djojohadikusumo, has positioned the fund as a vehicle to attract foreign investors for co-investment in local projects on equal terms. In contrast, Energy and Mineral Resources Minister Bahlil Lahadalia has insisted that domestic funds should take precedence, citing Prabowo’s directive to focus on projects like coal gasification without reliance on foreign capital.

This ambiguity has fueled concerns about the fund’s independence from political influence. Deni Friawan, a senior researcher at the Center for Strategic and International Studies (CSIS) in Jakarta, noted that while the inclusion of professionals from institutions like the World Bank and INA signals an intent to address governance concerns, the real test lies in whether these leaders can make decisions free from political pressure. “The appointments alone aren’t enough. What truly matters is how governance is structured and implemented” Friawan told The Jakarta Post on March 24, 2025.

Harry Su, a managing director at Samuel Sekuritas, echoed this sentiment, suggesting that while the names “look good on paper,” the critical issue of governance remains unresolved. “That’s why we have to wait until the end of this year to observe whether Danantara will really be free from political interference in its decision-making” Su stated in a comment to The Jakarta Post.

Controversial Appointments Raise Eyebrows

Among the most debated appointments is that of Thaksin Shinawatra, the former Thai Prime Minister, to the advisory board. Thaksin, who has faced allegations of corruption and tax evasion related to the 2006 sale of Shin Corp shares to Temasek and a 2008 land purchase case, brings a controversial past to the table. Critics argue that his inclusion could undermine public trust in Danantara.

Bhima Yudhistira, executive director of the Center of Economic and Law Studies (Celios), expressed skepticism about the government’s ability to build market confidence with such appointments. “He has a track record of corruption and tax evasion cases… His appointment could deepen public distrust in Danantara” Bhima told The Jakarta Post on March 24, 2025. While these allegations have been widely reported, it’s worth noting that Thaksin’s legal status remains a matter of public record in Thailand, and his role on Danantara’s advisory board does not involve operational control.

Similarly, Andry Satrio Nugroho from the Institute for Development of Economics and Finance (Indef) flagged potential conflicts of interest with figures like Ray Dalio and Chapman Taylor, who remain active in asset management. Nugroho suggested that the high-profile appointments might be a “cosmetic move” to boost investor confidence rather than a substantive strategy. “This strategy could backfire, as it might signal that Danantara struggles to attract investors without relying on big names” he warned in comments to The Jakarta Post.

Operational and Investment Priorities

Danantara’s leadership has outlined a clear set of priorities for its investment arm, with Pandu Sjahrir stating that the initial focus will be on food security, energy security, downstream industries, and digital infrastructure. The investment holding will be managed by Sjahrir alongside figures like Djamal Attamimi of Lynx Asia Partners and Stefanus Ade Hadiwidjaja, chief investment officer of INA.

On the operational side, Dony Oskaria will oversee the consolidation of SOEs under a dedicated holding structure. “Once we consolidate all SOEs under the operational holding, we will remap their structure and review existing holding companies” Oskaria explained to The Jakarta Post, addressing questions about the future of current SOE holdings in sectors like mining and tourism. This restructuring aims to streamline operations and enhance efficiency, though details on timelines and specific reforms remain sparse.

The operational holding will be led by figures such as Agus Dwi Handaya from Bank Mandiri, Febriany Eddy of PT Vale Indonesia, and risk management professional Riko Banardi. Meanwhile, committees for risk management and investment portfolios have been established, with leadership from Indonesia Stock Exchange president commissioner John Prasetio and Texas Municipal Retirement System CIO Yup Kim, respectively.

Balancing Ambition with Credibility

Danantara Indonesia represents a significant step in President Prabowo’s vision to elevate the country’s economic profile on the global stage. With an initial focus on critical sectors and a leadership team blending domestic expertise with international clout, the fund has the potential to drive meaningful development. However, the mixed signals on its investment strategy, coupled with concerns over controversial appointments, cast a shadow over its early days.

Analysts remain cautiously optimistic, emphasizing that the fund’s ability to operate independently will be the ultimate measure of its success. If Danantara can establish robust governance mechanisms and resist political interference, it could serve as a model for sovereign wealth funds in the region. Yet, as Nugroho of Indef pointed out, relying on high-profile names without addressing structural challenges risks undermining investor confidence rather than bolstering it.

For now, the spotlight remains on Danantara’s next moves. As the fund begins to implement its ambitious plans, questions linger about whether it can balance its bold vision with the credibility needed to win over both domestic and international stakeholders.