Jokowi picks banker Wirakusumah to head sovereign wealth fund

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JAKARTA — Indonesian President Joko Widodo on Tuesday named the head of a domestic bank to lead the country’s planned $15 billion sovereign wealth fund.

Ridha Wirakusumah, president director of Bank Permata, the 12th largest bank in Indonesia by assets, was given the role as CEO of the fund, known as the Indonesia Investment Authority, or INA. The banker has been in his position since 2016, after previously serving as managing partner at DNB Consulting and Investment Hong Kong for two years.

He has also served as CEO for the Asia-Pacific at General Electric Company, president and CEO of AIG Hong Kong and director of KKR Hong Kong. He is a graduate of Ohio University, and earned his doctorate in business administration from City University Hong Kong.

Wirakusumah was not initially in the running for the post, with other names such as partners at local venture capital companies touted, but his experience at foreign companies and networks with overseas investors won him support from the Ministry of State Owned Enterprises and Ministry of Finance, a source told Nikkei Asia. Both ministers hold a seat at the fund’s supervisory board alongside three private sector members.

The establishment of the INA is based on the sweeping omnibus law on job creation passed by parliament in October last year. Unlike other sovereign wealth funds around the globe, which often manage oil revenues, foreign exchange reserves or pensions, Indonesia’s is seeking to attract foreign funds as co-investors.

The government committed 15 trillion rupiah ($1 billion) from the state budget last year as an initial fund to be managed by the authority, and is inviting foreign partners as it seeks to grow the fund to 75 trillion rupiah this year. With participation from foreign partners, Indonesia is looking to grow the fund to around $15 billion.

Coordinating minister for economic affairs Airlangga Hartarto said in early February that promises from foreign investors so far have reached $9.5 billion, with contribution pledges from the likes of United States International Development Finance Corporation, Japan Bank for International Cooperation, Canada pension fund CDPQ, and Dutch pension fund APG-Netherlands.

There are “quite a few lists of infrastructure projects that we have earmarked” to invest the capital in, said Wirakusumah at a press conference on Tuesday. “We will concentrate on the toll road first because the multiplier effect is very large.”

Both he and finance minister Sri Mulyani Indrawati were keen to stress the importance of governance and professionalism at INA, with observers scrutinizing the fund after a corruption scandal at neighboring Malaysia’s 1MDB fund.

“The president has been clear that he does not want [an incident like] 1MDB to occur,” Indrawati said. “He asks all of us that we must be able to prove that Indonesia has an investment institution in the form of a SWF that is well managed with a [transparent] process.”

“When the supervisory board recruited the board of directors, this is a criterion that we also emphasized. We carry out a search of all these names so that we can be sure that their reputation and their professionalism are very strong and sufficient in safeguarding the SWF properly,” she added.

Four other members were appointed to the board of directors on Tuesday, including Arief Budiman, former chief financial officer at state-owned oil giant Pertamina, as deputy chief executive, and Stefanus Ade Hadiwidjaja, managing director of private equity company Creador, as chief investment officer.

Marita Alisjahbana, country risk manager at Citi Indonesia, was appointed chief risk officer, and Eddy Porwanto, director of domestic mining company Delta Dunia, was appointed chief financial officer.

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