Private to public: Indonesia taps PE talent for government

Sandiaga S. Uno arguably enjoys a higher profile in his local market than any other private equity executive in Asia. His Twitter posts are followed by more than 400,000 people; he was previously a columnist for The Jakarta Post; and he was ranked by The Jakarta Globe as the 47th richest Indonesian in 2016, with an estimated fortune of $830 million. Uno is one of only four members of the top 50 aged under 50, and his youthful image is reinforced by a passion for running.

Whenever he has spoken at AVCJ events, as co-founder of Saratoga Capital, Uno has attracted a crowd. This was the case once again this week when he gave a keynote address at AVCJ Indonesia fresh from his election as deputy governor of Jakarta. Uno and his running mate Anies Baswedan, a former education minister, secured a comprehensive victory in the polls last week.

This first step in what could be a distinguished political career officially begun in 2015 when Uno was appointed to the advisory board of the Great Indonesia Movement Party, also known as Gerindra. He duly gave up a string of corporate roles – including a directorship at Adaro Energy, the mining company through which he made his name as an investor – saying that politics was his calling and he wanted to “do something for the nation and bring prosperity to the people.”

Uno is not the first Indonesian PE executive to enter public service. Gita Wirjawan of Ancora Capital became chairman of the Investment Coordinating Board (BKPM) in 2009 and served as trade minister between 2011 and 2014. Tom Lembong, former CEO of Quvat Capital, was named trade minister in 2015 and now heads the BKPM. This is an astonishing hit rate, given only a handful of domestic private equity firms have raised institutional capital in the last 10 years. One explanation for it is a lack of talent.

Whenever industry participants are asked why there are so few domestic GPs for a market of Indonesia’s size, the first response is there aren’t many local people capable of raising money from institutional investors. To do this, some level of overseas education and work experience is required: but Indonesians are not going to foreign universities in the same numbers as their Chinese or Indian counterparts, and they are not swelling the ranks of investment banks and consulting firms. Many who meet these criteria come from wealthy families and end up working in the family business.

The same logic applies to certain positions within government. If, for example, a president wants a business friendly technocrat to handle the trade portfolio – someone who understands foreign investors – the pickings are slim. The scion of a family conglomerate might struggle to make the transition into politics, but a private equity executive could be a good fit. The founder of a firm may also have achieved such a level of professional success and economic security that he is actively looking for a new role.

Wirjawan, Lembong and Uno all went to university in the US. Wirjawan worked for Goldman Sachs and J.P. Morgan before founding Ancora, while Lembong spent his pre-Quvat days in investment banking, with the Indonesian Bank Restructuring Agency, and at an investment firm backed by Farallon Capital. Uno cut his teeth doing oil deals for NTI Resources out of Singapore before returning home to set up resources-focused investment firms PT Recapital Advisors and then Saratoga.

No matter how illustrious the CV, an individual embarking on a second career in public service has to prove himself. Uno differs from Wirjawan and Lembong in that he is a PE executive entering politics rather than one drafted into a business-related position in government. But ultimately it is a question of making private sector acumen count in a public context, whether that means finding innovative solutions to problems or being open to the views of different stakeholders

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• Topics
• Southeast Asia
• GPs
• Indonesia
• Saratoga Capital Group
• Quvat Management
• Ancora Capital Management
• Appointments