Improving corporate governance help markets perform and allow for exits, so private equity performance can follow
[SINGAPORE] Strong public markets in Asia can help bring investment flows to the region and help recycle capital, said Pandu Sjahrir, chief investment officer of Danantara Indonesia, and GIC adviser Jeffrey Jaensubhakij at the Milken Institute Asia Summit on Thursday (Oct 2).
A falling US dollar and lower interest rates will “definitely help” to bring capital flows to Asia, but the region needs the public markets to “not only do well for a year, which we have had, but also continue to do well for a couple of years”, said Jaensubhakij during a panel discussion at the summit.
Jaensubhakij was group CIO of GIC from 2017 to April 2025. He is now adviser and a board director at the Singapore sovereign wealth fund.
The performance of Asia’s public markets can help private equity exit multiples and valuations reach a level that is sufficient for investors to allocate capital, he said.
“I am hopeful for that. But there is a lot that governments and stock markets need to do to help in terms of corporate governance,” he added. “Japan has been very successful – it has a value-added corporate governance push. Korea is pushing very hard. This, among other things, will also help those public markets perform well, allow for exits, and then private equity can follow.”
MSCI AC Asia Pacific Index is up 21.6 per cent year to date as at Oct 1, outperforming the MSCI World Index, which is up 16.4 per cent year to date.
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Public markets are probably the most important way to recycle capital, said Sjahrir during the same panel discussion.
“We are really pushing (to) increase the daily trading volume… We are only at a billion dollars today. If you look at India, a billion dollars was (in) 2012, 2013 – we have to go to at least five to eight billion dollars in the next five, six years,” he said.
A bigger capital market will also help drive Indonesia’s macro story, he added. “Indonesia is a wonderful story, wonderful place, but we’re not very good at telling our story,” he said. “If you have a bigger capital market, people will create the macro story for you.”
Overseas investors tend to look at Indonesia’s capital markets as a first reference and may have negative assumptions about how developed the country is, he said. “Indonesians themselves have under-invested in our own capital market,” he added
“(But) the macro story in Indonesia is actually fantastic. We have a great young population. Our politics – President Prabowo has an 80 per cent plus approval rating… And in terms of economic growth, it’s 4.5, 5 per cent,” he said.
Danantara, a seven-month-old sovereign wealth fund of Indonesia, employs close to 300 people and manages nearly US$1 trillion in assets.
