Indonesia is a “must-have” component for any fund with a Southeast Asia strategy, but turning this conviction into concrete portfolio exposure remains a challenge, a panel of regional and global investors shared at a recent DealStreetAsia event, just a day after a warning from index provider MSCI rattled the country’s stock markets.
Five regional and global investors affirmed the archipelago’s long-term potential while advocating for a radically localised and disciplined investment and exit approach during a panel discussion titled ‘Beyond the hype: How are global investors examining Indonesia’s potential and risks?’ at the Indonesia PE-VC Summit 2026 in Jakarta on January 29.
As Southeast Asia’s economic powerhouse, accounting for about one-third of the regional GDP, Indonesia should be indispensable to any investor with a Southeast Asia focus, the panellists concurred. However, they highlighted a gap between this strategic ambition and on-the-ground reality, as market complexities and exit challenges in Indonesia hamper efforts in building a viable portfolio locally.
“We cannot allow ourselves to be a Southeast Asian fund-of-funds (FOF) and ignore Indonesia. But the truth is, we are finding it challenging due to a number of reasons,” said Juan Figar, founder & managing partner of Collyer Capital, as he pointed out “high valuations” and a “discomforting” regulatory environment as some of the main challenges.
Collyer Capital is a Singapore-based boutique investment firm seeking Southeast Asian opportunities for European family offices. It operates a hybrid investment strategy combing primary fund investments, as well as co-investments and secondaries.
The firm is raising $80 million for its Southeast Asia-focused FOF, out of which it has already deployed $35 million with a concrete pipeline to invest another $15 million over the coming months, according to Figar.
“Our exposure to Indonesia is very low in the fund, versus what we had envisioned only 18 months ago,” said Figar, explaining that the fund’s initial plan was to invest about 25-30% in Indonesia.
South Korean venture capital (VC) firm Woori Venture Partners also sees Indonesia currently accounting for only a fraction of its global portfolio of over 2,000 companies. Having just expanded its footprint into Southeast Asia, with the opening of a Singapore office in the summer of 2023, the firm has made fewer than 10 investments in Indonesia to date.
The plan for Woori Venture Partners is to “ramp up” investments in high-potential companies and founders across Southeast Asia, including Indonesia, said Woori Venture Partners’ director Alan Ang.
Compared with the US and China, Indonesia represents “a whole new ball game” for global VC investors like himself, from investments to exits, said Ang.
‘Selective underwriting’
The panel discussion took place a day after index provider Morgan Stanley Capital International (MSCI) issued a warning over insufficient transparency in the ownership structure of Indonesian stocks.
In the week that followed, MSCI’s comments on Indonesian securities led to a historic wipeout of about $84 billion in market value of the Indonesian Stock Exchange (IDX), and the resignation of multiple key officials, including IDX’s president director, Iman Rachman, and Mahendra Siregar, the head of the Indonesian Financial Services Authority (OJK).
Responding to an audience question on MSCI’s warning, Pradita Astarina, a Southeast Asia-focused venture partner at Hong Kong-based growth equity fund Strategic Year Holdings Limited, viewed it as “a recalibration” back to fundamentals.
In the face of such events, Astarina emphasised the need for “disciplined entry valuations”, which price in macro correlation risks relating to foreign exchanges, government policies, and other unexpected market changes that may hinder execution of transactions or post-deal value creation and business growth.
For overseas investors, the previous hype of narratives touting Indonesia as a market of numerous growth stories has changed into “selective underwriting”, said Astarina.
Although there is no scarcity of dry powder awaiting deployment into this market, Astarina suggested that founders be more disciplined with their cash reserves. Investors, meanwhile, need to strategise alternative exit pathways instead of relying solely on blockbuster IPOs.
“Investors must strategise alternative exit pathways instead of relying solely on blockbuster IPOs.”
Kuan Hsu, managing director of Synexia Ventures, said that many sophisticated investors in emerging markets have learnt the lesson: “Don’t ever be surprised by surprises when you invest in Indonesia.”
While the nascent Synexia Ventures is still in the process of building a portfolio, following its launch in November 2025 as Japanese telecom giant NTT Group’s first VC investment vehicle in Southeast Asia, Hsu drew from his past 15 years of investing across the region, advocating for rigorous oversight, paired with a flexible, open mindset and a strong on-the-ground presence as the keys to navigate the Indonesian market’s unpredictability.
Hsu was previously at Japanese rainmaker Koichi Saito-founded KK Fund and the corporate venture capital (CVC) arm of Japan’s Gree Holdings.
“When we invest, we ask for monthly financials and monthly catchups with the founders, and we try to make sure all the terms and conditions are clearly spelt out—perhaps a very Japanese thing to do. But still, we will be caught by surprises both on the upside and sometimes, on the downside as well,” said Hsu.
Overseas investors need to invest in Indonesia for “long-term building”, said Hsu.
In one example, he said that NTT East, a subsidiary of NTT Group, invested about $100 million in Indonesia’s SURGE Group in April 2025 to provide affordable, high-speed fibre-to-the-home (FTTH) services in the country.
A ‘K-shaped’ economic reality
Still, the macro backdrop of Indonesia reveals a split economy. Setting the macro context, Saemin Ahn, managing partner of Rakuten Capital, highlighted Indonesia’s “K-shaped” economic trajectory and growth pattern.
While one arm is propelled by massive foreign direct investment (FDI)—approximately $50-60 billion annually—flowing into sectors like nickel downstream projects, smelters, and electric vehicle (EV) factories, the other arm reveals a mismatch: A young demographic seeking white-collar jobs leads to a scarcity of skilled workforce in those high-growth, supply chain sectors, Ahn explained.
“This is causing a lot of secondary leakages,” said Ahn, where the country’s large working-age population is not being efficiently utilised, leading to wasted potential and stagnation in its economic growth.
Fiscal pressure and adverse economic events like MSIC’s warning also add to the challenges that the country faces, triggering capital outflows and market jitters, said Ahn.
His views were echoed by fellow panellist, Collyer Capital’s Figar, who added that for Indonesia to achieve its full potential, investments in quality education are the key.
“The growth of this nation will happen when, or if, all its young population gets trained, educated, and paid through access to quality education,” said Figar.
Furthermore, this K-shaped economic reality is leading to lack of impetus in its tech-centric innovations, said Ahn.
“If you look at what’s happening right now, I think in many ways, it’s too much to ask for the country and the government to try to build tech-centric startups,” said Ahn.
“It should be much more utility-based, if the government… adds on to the strength it has. If the government and the industry want to succeed, [they should] invite those [foreign] investors into the supply chain and heavy industry innovations and let those succeed, and let the aftereffects to that of tech innovations, and so on and so forth,” said Ahn.
