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tate-owned fund manager PT Bahana TCW Investment Management plans to offer a new private equity product in November to be invested specifically in the infrastructure sector in the wake of the government’s effort to boost national development.

Bahana TCW, a joint venture between state-run PT Bahana Pembinaan Usaha Indonesia and Los Angeles-based Trust Company of the West (TCW), expects to meet one-on-one with prospective investors for the new product in the near future.

The collected funds will be invested in companies, particularly state-owned firms, operating in the infrastructure sector and its supporting businesses.

“The funds could be invested in companies that supply concrete, cement or electricity. In sum, it is aimed for companies related to the infrastructure development,” Bahana TCW president director Edward P. Lubis told The Jakarta Post during a recent media visit.

The development of basic infrastructure facilities has become one of President Joko “Jokowi” Widodo’s top priorities to resolve Indonesia’s inefficient logistics system and acute distribution bottlenecks that have seriously hampered economic development.

Earlier this year, the government issued two legal bases to expedite 225 projects listed as “national strategic projects” and a mega power plant project. They cover 13 sectors, such as railways and toll roads. The projects will receive special backing and attention from the government, as stipulated by a presidential regulation.

Since 2008, Bahana TCW has introduced four private equity products using a private placement scheme. Those products are in line with the Financial Services Authority’s (OJK) target to lure investment into the real sectors.

Bahana Port Private Equity, for instance, was launched in December 2008 to collect funds for the construction of a port project in Penajam, East Kalimantan, while Bahana BUMN Fund I was introduced in April 2009 to cater investment in the telecommunications sector and its supporting businesses.

Meanwhile, the company also has Bahana Infrastructure Fund I and Bahana Industrial Fund USD I, targeting to lure Rp 110 billion (US$8.46 million) investment in port infrastructure and almost Rp 500 billion in the textile industry, respectively.

“Now, seeing the government’s effort to boost the national development, we want to provide a new product related to the infrastructure sector once again,” Edward said.

Bahana TCW, which has Rp 36 trillion in assets under management, expects its private equity products to absorb a great amount of money from the government’s ongoing tax amnesty program.

“We believe those funds, especially from the repatriated assets, will eventually go to our products,” Edward said.

The amount of repatriated assets under the tax amnesty hovered at Rp 136 trillion, far below the Rp 1 quadrillion targeted, although overall assets declaration reached Rp 3.59 quadrillion, or 90 percent of the target, during the first phase of the program’s implementation that ended September.

Brokerage house Daewoo Securities is optimistic that the number of repatriated funds will reach its peak in the second phase of the program, in the period of October to December.

“If it succeeds, it will definitely bring positive multiplier effects for the country’s economy,” said Daewoo Securities research associate Giovanni Dustin.

—JP/Viriya P. Singgih