The Asian Banker Sunday, 14 July 2024

Manulife and Indonesia Investment Authority invest in Indonesian real assets

5 min read

Manulife Investment Management and the Indonesia Investment Authority (INA), the sovereign wealth fund of Indonesia, jointly announced today a strategic partnership that will focus on the overarching goal to further develop infrastructure in Indonesia and explore investment opportunities in the real estate and natural capital sectors.

The partnership, which has been formalised through the execution of a memorandum of understanding (MOU) between the two organisations, will aim to invest proprietary capital and collectively raise capital from third party investors both domestic and international. The partners, who share a common objective to support sustainable and stable long-term growth, are also committed to pursue investment opportunities in various logistics assets in Indonesia and are set to explore additional joint investments through a fund strucuture.

Serving the Indonesia market since 1996, Manulife Investment Management is one of Indonesia's largest investment managers and brings in a wealth of experience in real assets development and asset management from Asia and globally. This extensive experience positions Manulife Investment Management as a trusted and reliable partner for investors seeking opportunities in Indonesia's real assets market.

As Indonesia's first and only sovereign wealth fund, INA is tasked with a dual mandate: to contribute to Indonesia's sustainable economic development, and to build wealth for future generations. In just under three years, INA, alongside its co-investor partners, has deployed more than $3 billion, establishing strong relationships with a myriad of investors, including sovereign wealth funds, pension funds, asset managers, and strategic partners globally.

Global supply chain diversification, increase foreign direct investments and the rapid growth of the manufacturing sector have boosted demand for logistics properties in Indonesia. While Indonesia is the second largest e-commerce market in the world, and the largest in Southeast Asia, the country is significantly undersupplied in terms of modern warehouse space. Indonesia’s e-commerce penetration rate is forecasted to increase from 57% in 2022 to 78% in 2025 and e-commerce revenue forecast to rise from $68.5 billion in 2023 to $104.1 billion by 2027.

Peter Kim, senior managing director and head of institutional business, Asia Pacific (Ex Japan), Manulife Investment Management, said: "We are excited to enter into our first strategic partnership with INA and contribute to Indonesia's economic progression. We have seen strong appetite through our conversations with institutional investors in Asia’s real assets sector and within Southeast Asia, Indonesia is one of the most attractive markets given its surging consumer class and the exponential growth of e-commerce. We recognise there is robust demand for high-quality logistics, data-centres, and other new economy infrastructure assets in the country from both multi-national and domestic customers. Our collaboration with INA not only aims to meet the evolving needs of the real assets sector but also reflects Manulife Investment Management’s commitment to Indonesia, a key market in our private assets strategy for the fast-growing Southeast Asia region."

Kenny Lam, chief investment officer and head of transactions, Asia Pacific Real Estate at Manulife Investment Management, said: "We are thrilled for the opportunity to partner with INA to execute our real estate investment strategy in Indonesia where we see exceptionally strong fundamentals and growth potential to expand our footprint and portfolio in the Asia Pacific region. We are committed to leveraging our global scale as well as local capabilities to provide solutions and create value on behalf of our partners and clients. Our plan is to acquire, develop and manage high quality industrial assets and data centres in Indonesia together with INA to achieve sustainable returns as well as ESG objectives."

Ridha Wirakusumah, CEO, Indonesia Investment Authority, stated: "Partnering with Manulife Investment Management, recognised globally for its leadership in real assets, aligns closely with our ongoing efforts to enhance Indonesia’s logistics and digital infrastructure. This collaboration leverages our combined strengths—Manulife's global expertise and our deep local insights—to drive substantial progress in these critical sectors. Concentrating on the burgeoning logistics and data centre markets not only aligns with the substantial growth in digitalisation and e-commerce but also positions us to capitalise on the immense opportunities within Indonesia’s dynamic economy. Our joint efforts are rooted in a commitment to responsible, long-term investment, reflecting INA and Manulife Investment Management's shared dedication to supporting Indonesia's development in a sustainable manner. We aim to create value that benefits not just our partners but the wider Indonesian community."

Manulife Investment Management develops and manages real estate assets for thousands of customers around the globe as part of its comprehensive private markets capabilities. Its Asia real estate team manages $3.1 billion of real estate assets in the region totaling 14.2 million square feet. In recent years it has focused its attention on logistics-related assets which the firm believes could generate value not just for investors but also for the markets it invests in as consumer consumption habits continue to shift to an online world. Manulife Investment Management is also one of the world’s largest natural capital investment managers, with nearly $15 billion in assets under management in timberland and agriculture combined.


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