Principal Launches Social Impact Bond Fund in Indonesia

Jakarta, 19 July 2019 – PT Principal Asset Management (“Principal”) today announced the launch of the Principal Philanthropy Social Impact Bond Fund (“the Fund”), which aims to generate competitive financial returns as endowments to support foundations that pursue social and environmental causes aligned with the United Nations’ Sustainable Development Goals (SDGs).

The Fund will be the first broadly available fixed income fund launched by Principal in Indonesia since they rebranded the company as PT Principal Asset Management from CIMB-Principal Asset Management in May 2019. With Principal now playing a more prominent role, the company intends to deepen its commitment in the region for helping people achieve their best lives.

“The launch of our philanthropy fund marks a new milestone for Principal in Indonesia,” said Agung Budiono, CEO of Principal Indonesia. “As part of our global mission of helping people live their best lives, we also believe in helping our customers to help support the communities where they live and work.”

The Principal Philanthropy Social Impact Bond Fund will invest in portfolios with a minimum of 80 percent in IDR-denominated Government and/or Corporate Bonds, and a maximum of 20 percent in IDR-denominated Equity and/or Money Market Instruments. The Fund is run by the Principal investment team in Indonesia, who employ a stringent research and investment approach that aims for compelling absolute and risk-adjusted performance. The Fund is available in Indonesian Rupiah (IDR) with a minimum initial investment of IDR50 million, and minimum additional investment of IDR50 million. The Fund’s performance is benchmarked against Indonesia’s Government Bond Index. Investors can invest in the Fund via consultants of Principal or PT Bank CIMB Niaga Tbk.

Upon subscription, investors can donate their investment returns to social foundations of their choice through a tiered endowment scheme. Silver-tier investors can donate 100% of their investment returns and management fee-sharing; while gold-tier investors can donate 100% of their capital, 100% of their investment returns, as well as management fee-sharing. Principal has partnered with Standard Chartered Bank in Jakarta to act as the custodian bank in distributing all donations to the respective beneficiaries.

Unlike other philanthropy funds available in the market, the Principal fund will be the first fixed income thematic fund of its type in Southeast Asia that allows donations of investment returns to be distributed to multiple beneficiaries, thus increasing the potential for greater impact across all social areas identified by the UN’s SDGs. Currently, the Fund has a total of seven beneficiaries, with more to be added in the near future:

doctorSHARE – a non-profit organisation focusing on free medical and health services as well as humanitarian aid for poor and marginalised communities
Rachel House – provides palliative care to children from marginalised communities living with serious illnesses such as cancer and HIV AIDS
Roslin Orphanage – a self-sustaining home for destitute and orphaned children in West Timor
Habitat for Humanity Indonesia – Indonesian chapter of an international non-profit organisation that helps people in poor communities build or improve a place they can call home
Difa Sukses Mandiri – a local non-profit organisation that provides employment opportunities for people with disabilities
TORAJAMELO – a social enterprise that seeks to elevate the quality of life for poor women who work as weavers in Indonesia
Save the Children Indonesia – a non-profit organisation that seeks to protect the rights of children in Indonesia Principal is a Fortune 500

global financial services company offering retirement, insurance, and asset management solutions to more than 24 million customers in more than 80 countries. Our mission in Asia and other emerging markets worldwide is to help businesses and people gain financial security and independence to achieve their lifetime financial goals and advance their financial futures.