INA turns up the tempo on private credit partnerships
Indonesia Investment Authority (INA) is accelerating its plans on private credit investing, inking three deals over the past few months to make co-investments.
One of the more recent ones is with DB Investment Partners, a private capital investment firm and a Deutsche Bank subsidiary, to jointly invest $1 billion in hybrid capital solutions in Indonesia within the next five years.
This is part of the $10.5 billion sovereign wealth fund’s (SWF) drive to develop the country’s private markets, a key area of focus for global institutional investors.
“Our current (and future) partnerships with leading global asset managers are strong testament that global investors have confidence in the overall value proposition of investing in Indonesian businesses; that there is a scalable channel for accretive capital that has meaningful impact for the ecosystem; and that there is cohesive support from local investment stakeholders,” Christopher Ganis, managing director of hybrid capital solutions (HCS) at INA, told AsianInvestor.
The HCS team has been quite active over the past 12 months.
INA also inked similar deals with Allianz Global Investors in September and the Development Bank of Japan in November 2023.
It also signed a $1.2 billion deal in early November with multi-asset investment firm Granite Asia to invest via both equity and hybrid capital solutions in businesses and companies with a strong Indonesia nexus.
Momentum to build out HCS investments has picked up with the hire of Ganis, who joined INA in February from investment giant BlackRock, where he was the former head of private credit for Indonesia.
COMPLEMENTARY ROLE
From pension funds to insurers and family offices, asset owners in the region have told AsianInvestor that they are keen to invest in or are increasing private credit allocations.
INA, for its part, is also hoping to improve the range of lending solutions for local businesses with this tie-up while generating strong returns.
Seeing the value proposition in private credit, INA has built out organic capabilities by developing a dedicated in-house team and collaborating with best-in-class partners.
The HCS team aims to provide capital through bespoke funding structures across capital structures: specifically in secured lending, asset-backed funding (including infrastructure), structured solutions and growth funding.
“It seeks to complement the role of traditional capital providers (i.e. banks, capital markets, etc) by becoming capital absorbers in market downturns and catalysing growth in up cycles due to its flexible and non-permanent capital nature,” said Ganis.
All the partnerships under HCS are centered around opportunities that stimulate Indonesia’s economic growth across sectors that have strong alignment with the national development agenda.
Areas of interest include digitalisation and digital infrastructure, downstream natural resources (including critical minerals), healthcare, transportation and logistics, tourism, food and agriculture, and green energy and transformation, he added.
The SWF has made one hybrid capital solution investment to date – in Traveloka, an Indonesia-based online travel agency, alongside global investment partners, the wealth fund told AsianInvestor previously.
STAYING SELECTIVE
Still, INA emphasised that it does not plan to have a big roster of managers for such investments.
"We view each partnership as valuable long-term investments that need consistent upkeeps, communications and utmost commitments to ensure objectives from each side are achieved in optimal manner,” said Ganis.
“Given the perimeters and objectives of the partnerships that we would like to achieve; frankly speaking, it will just not be feasible for us to have a very large number of partnerships.
“The objective here is not to achieve the highest numbers of partnerships," he added noting that is it more about having the “optimal quality to achieve both our partners’ objectives and INA’s dual mandate.”
INA has a dual mandate – to contribute to Indonesia’s sustainable economic development and build wealth for future generations.
Its investment strategies place significant emphasis on attracting foreign capital into Indonesia as well as becoming a ‘scale partner’ for partners evaluating investment opportunities in the country.
“Very selectively, INA employs a consistent, proactive and methodical approach to identify and to expand collaborations with like-minded and leading investors; especially those that can drive strategic long-term value to the Indonesian economy,” added Ganis.