Pinnacle Investment CEO Calls for Greater Diversity in Indonesia’s Investment Market
What are some of the interesting investment products and themes for HNW clients in Indonesia today? What can the local wealth management market offer and is regulation helping the wealth industry to diversify the products, both onshore and offshore? Or is more liberalisation still some way off? Guntur Putra, co-founder and Chief Executive Officer of Pinnacle Investment, offered delegates his views during a panel discussion on these topics at the Hubbis Indonesia Wealth Management Forum on July 6.
Guntur offered delegates views based on significant experience in the domestic and international markets. He is a member of Pinnacle Investment’s Executive and Investment Committee, and before helping found the firm he was a Managing Partner and investment manager at Ares Capital, a quantitative hedge fund and advisory firm based in Jakarta. Before that he worked for Blackrock in New York, where he was responsible for providing strategic advice to institutional clients on portfolio/investment strategies, analytics, and risk management across various asset classes. He started his investment career as an analyst at Credit Suisse First Boston in New York.
He first focused his attention on the rising prominence of ESG in Indonesia, especially amongst wealthier investors. “We have seen tremendous growth amongst institutions, HNWIs and UHNW clients,” he reported.
“We launched our first ESG ETF some five years ago, when as a firm we only had one product listed on the local bourse. But right now, in the market there are some 25 ETFs and mutual funds focused on the ESG space. Another notable growth area is the private markets amongst wealthier clients.”
He added that right now due to global concerns and market volatility, domestic investors are watching and waiting, but he said that valuations in the domestic market are such that there is upside potential emerging. “There is upside potential, and buyers are waiting on the side lines for the right time to go back into the market,” he reported.
Guntur commented on the regulatory environment, indicating that, on the whole, they were trying to conduct matters in a more transparent manner in order to regulate the whole industry, even if on occasions they surprised the market with some moves that seem counter to the trend towards liberalisation.
“Tightening in areas such as mutual funds and investment linked products surprised many in this industry, but we will need to see how policy develops in the future,” he said.
He offered more insights into the evolution of the private market, noting that there is rising demand, but more attention needs to be paid to encouraging limited partnerships in Indonesia actually invest more within the country rather than offshore.
His final word was to call for a more encouraging environment for the creation and launch of more innovative products. “We have been keen on developing the dialogue with the Indonesian regulators to help encourage more new products and greater innovation,” he reported. “Our distributors see the demand out there, and we would like to be able to supply more and greater diversity.”
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