Government Projects Family Office Investment To Reach 500 Billion US Dollars

JAKARTA - The government projects investment from the management of family-based funds that can be withdrawn to Indonesia to reach 500 billion US dollars in the next few years.

Minister of Tourism and Creative Economy (Menparekraf) Sandiaga Salahuddin Uno noted that this amount is 5 percent of the total funds owned by family companies in the world of 11.7 trillion US dollars.

"If we look at yesterday, which was presented with a total family office of 11.7 trillion USD funds under management. If Indonesia can withdraw only 5 percent, we are talking that the USD 500 billion figure is quite large in the next few years," Sandiaga said as quoted by ANTARA, Monday, July 1.

Sandiaga explained that President Joko Widodo instructed the formation of a special team led by the Coordinating Minister for Maritime Affairs and Investment (Menko Marves) Luhut Binsar Pandjaitan to review this family office investment scheme in Indonesia.

The study, which will be conducted in the next month, will discuss regulations and potential, as well as the many requests from the world's family office community that want the scheme to be implemented in Bali.

"It has been thought about in terms of potential, regulation and a special team will be formed to review this and it is hoped that we can also offer such as Singapore, Dubai, Hong Kong, there is an attraction from the management of this family-based fund in Indonesia," said Sandi.

According to Sandiaga, this family office scheme will provide easy services and permits for large family financial clusters to invest their funds in Indonesia.

He assessed that this scheme is an opportunity for domestic investment because there are many health offices or companies owned by families in Indonesia that place their fund management outside Indonesia.

"If we call this a slow hanging fruit. So the quick wins are companies owned by Indonesian families to manage their investment not outside Indonesia, but in Indonesia," he said.

The implementation of this family office scheme, said Sandi, only requires regulatory adjustments, considering that Indonesia already has an attraction in terms of investment, not only in financial assets, but also investment in a green economy, and philanthropy.

Sandiaga said this family office scheme is an opportunity for additional funds, so it does not become a necessity for family company owners.