For Indonesia’s sovereign wealth fund, whose chief investment officer was also a speaker at the event, there were three main factors guiding its investment strategy: commercial returns; attracting foreign direct investment; and contributing to the country's economic and social development, said Stefanus Ade Hadiwidjaja of the Indonesian Investment Authority (INA).
Among the thematic investments it has undertaken, which are also considered Indonesia’s top national priorities, have been transportation infrastructure such as toll roads, ports and cargo terminals.
Another investment theme that is set to receive more attention from INA is digital infrastructure, namely telecommunications towers, optic fibre, data centres, and broadband services.
“We want to make sure the growth of digitalisation in Indonesia is supported by strong infrastructure,” he said, adding INA could also invest in e-commerce and set up a digital growth equity fund in future.
With the Covid pandemic still fresh in the minds of Indonesians the area of social infrastructure and healthcare security - namely hospitals and pharmaceutical companies - stood out as a key sector that is expected to be on INA’s agenda.
INA will also focus on green investing.
“You’re talking about renewable energy, waste management and so on,” he said.
As a sovereign wealth fund, INA adopts a long-term investment strategy, which gives it also the flexibility to adjust its investment horizon.
“We can stay until the end of the concession, say 25 years or 40 years. We can also be opportunistic by investing and exiting like private equity in 5 years to 7 years,” he said.
Meanwhile, for Sequis Life, one of Indonesia’s top life and health insurers with total assets of Rp18.4 trillion ($1.28 billion), its investment strategy has been gravitating towards sustainable assets.
“For us, institutional investors, the megatrend means ESG (environmental, social and governance),” said its chief investment officer Muhamad Umar Johan Sidik.
“I would say adoption rates for ESG is promising since 20% of domestic listed companies have already adopted ESG and submitted required sustainable finance report,” he said.
He said Sequis’ portfolio, which has traditionally been dominated by investments in transportation infrastructure, has diversified to include digital infrastructure – such as tech startups and unicorns – and ESG assets, which include the electric vehicle and battery industry and tidal energy projects.
In terms of managing risks, he said it was important for the company to maintain a balance.
“As practitioners, we just have to be as comfortable as possible with all possible risk scenarios and review the optimal structure for our portfolio that’s relatively sustainable in the long term.”