The Indonesia Investment Authority (INA) and Allianz Global Investors (AllianzGI) have signed a memorandum of understanding (MoU) to deploy up to $200 million annually into hybrid capital solutions for Indonesian businesses, according to an announcement on Monday.
The hybrid capital solutions will focus on providing customised credit solutions and entail innovative financing methods which blend various financial instruments, with a particular emphasis on investments that address the country’s critical infrastructure needs and support the country’s energy transition efforts, as per the announcement.
“Our joint initiative to deploy hybrid capital solutions is about crafting a robust framework for financial innovation that supports the sustainable expansion of local enterprises. Together, we aim to enhance the investment landscape in Indonesia, ensuring each venture not only supports local economic growth but also adheres to stringent optimal risk-adjusted returns,” said Ridha Wirakusumah, CEO of INA.
“Since establishing our private credit team in 2018, we have steadily expanded our presence across Asia, recognising the immense potential the region holds for investment opportunities. Indonesia’s growth trajectory, particularly in infrastructure and energy transition, aligns closely with our strategic priorities,” said Sumit Bhandari, Lead Portfolio Manager of Asia Private Credit at Allianz Global Investors.
AllianzGI’s Asia strategy is centred on Southeast Asia; South Asia, which consists mainly of India; and Oceania — Australia and New Zealand. The tier-1 countries identified by the firm are Australia, India, Singapore, Indonesia, and Vietnam.
Bhandari had told DealStreetAsia in an earlier interaction that for the firm, India and Southeast Asia have probably been more active than Australia.
Highlighting the uniqueness of each of these markets in the Southeast Asia region, he said that Singapore, for instance, will always remain a key hub for a lot of businesses. Indonesia is one of the largest economies in the region in Southeast Asia, and Vietnam is a direct beneficiary of the emerging trend of decentralisation of supply chains that are excessively reliant on China.
AllianzGI is a global asset management firm with $619 billion in assets under management (AUM) as of June 30, 2024, including over $100 billion allocated to private market assets.
