How the Middle East became central to Indonesia’s new sovereign wealth fund |
Indonesia’s newest sovereign wealth fund, announced its first overseas investment not in a financial capital, but in Mecca.
Earlier this month, Danantara Indonesia acquired the 1,461-room Novotel Makkah Thakher City and 14 adjoining land parcels totalling roughly 4.4 hectares, located about 2.5 kilometers from Masjid al-Haram. Executed through Danantara Investment Management in partnership with Saudi developers Thakher Development Company and Al Khomasiah Real Estate Development, the transaction gives Indonesia its first state-backed hospitality presence in Islam’s holiest city. The land will be developed in phases under an integrated master plan that could eventually support up to 5,000 hotel rooms, alongside retail and supporting facilities, subject to regulatory approvals.
For a fund launched less than a year ago, the choice is telling. Danantara’s first step abroad did not follow conventional routes through New York, London or Singapore. Instead, it followed the arc of its earliest trust. The Middle East had already become the center of Danantara’s world — and Mecca made that visible.
Danantara was formally inaugurated in February 2025 by President Prabowo Subianto after amendments to Indonesia’s state-owned enterprises law consolidated the Indonesia Investment Authority and seven major state-owned enterprises under a single investment platform. With initial capital of roughly $20 billion and assets under management approaching $900 billion, Danantara was designed to manage state assets commercially while projecting Indonesia as a credible sovereign investor, modelled on........