Manulife signs agreement with Indonesia SWF for natural capital investments

Manulife Investment Management’s agreement with the Indonesia Investment Authority will focus on real estate investments initially, to support the country’s logistics sector.

Manulife Investment Management has formed a strategic partnership with the Indonesia Investment Authority (INA) to explore investments in natural capital.

The partnership, which has been formalized through a memorandum of understanding, will see Manulife IM invest the proprietary capital of INA, Indonesia’s sovereign wealth, as well as collectively raise capital from third-party investors in Indonesia and other countries.

The organizations said the agreement will focus on the overarching goal of developing Indonesia’s infrastructure, including in the logistics sector, with a focus on making investments in the real estate and natural capital sectors.

A joint statement from the two said they would also explore making additional investments through a fund structure in due course.

No detail was provided on the potential size of the investment commitment from INA or on any specific pipeline of assets. Both Manulife IM and INA declined to comment, citing the fact the agreement had only just been signed and was at a nascent stage.

INA is Indonesia’s only sovereign wealth fund and has a dual mandate: to contribute to sustainable economic development in Indonesia and build wealth for future generations. In the last three years, INA has deployed more than $3 billion alongside co-investment partners, it said in a statement.

The agreement with Manulife IM will see INA try to boost the development of Indonesia’s logistics sector in particular, as the country is undersupplied in terms of warehouse space despite being the second-largest e-commerce market in the world.

While a joint statement from the two organizations repeatedly referred to planned investments in warehouses and data centers to support this sector, there was no further detail on potential investments in natural capital beyond a brief mention.

INA chief executive Ridha Wirakusumah said: “Partnering with Manulife Investment Management, recognized 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 center markets not only aligns with the substantial growth in digitalization and e-commerce, but also positions us to capitalize 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.”

Peter Kim, senior managing director and head of institutional business, Asia-Pacific (ex-Japan) at 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 recognize there is robust demand for high-quality logistics, data centers and other new economy infrastructure assets in the country from both multinational 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.”