Danantara Investment Management, Indonesia’s recently established state investment vehicle, has partnered with SMBC Aviation Capital and Mandiri Investment Management to develop the Mandiri Aviation Leasing Fund.

The launch of the US$800 million platform marks Jakarta’s entry into the global aircraft leasing market and signals its ambition to move up the value chain in capital-intensive industries.

The initiative will also position Indonesia within the aviation leasing value chain, an industry historically concentrated in hubs such as Ireland, Japan, Hong Kong and Singapore.

The new entity features Danantara as a strategic anchor investor, with SMBC Aviation Capital providing global aviation leasing expertise and Mandiri contributing structuring and execution capabilities.

The partnership expects the collaboration to create an institutional-grade vehicle for investors to gain exposure to high-quality aviation assets, while building the country’s own domestic aviation capabilities in a sector currently dominated by global players.

"This partnership represents a significant step in Indonesia's participation in the global aviation finance ecosystem,” says Pandu Sjahrir, chief investment officer of Danantara Indonesia.

“By anchoring this project alongside SMBC Aviation Capital and Mandiri Investment Management, Danantara Indonesia is investing in a world-class platform that delivers strong returns while building strategic capabilities for the nation."

Policy shift

At an initial size of US$800 million, the fund is modest relative to established leasing players. For Indonesia, however, the move reflects a broader policy shift, leveraging state capital not just for essential domestic infrastructure development but also for participation in global financial ecosystems that could generate recurring, dollar-linked returns.

Barry Flannery, chief commercial officer of SMBC Aviation Capital,  adds: "We are very pleased to form this strategic partnership, which will help progress the aviation ecosystem in Indonesia and beyond. Working closely with Mandiri and Danantara Indonesia, we look forward to supporting long-term growth, innovation and collaboration across the sector."

The partnership also serves as a foundation for broader and ongoing economic cooperation between Indonesia and Japan, while also creating opportunities for further cross-border investment between the SMBC Group and Danantara Indonesia.