Asset Management Agreement Template for Indonesia

An Asset Management Agreement is a fundamental legal contract that governs the professional relationship between you as a client and an asset management company in Indonesia. This document formally delegates the authority to manage your investment assets while establishing clear terms for investment strategies, risk management, fees, and regulatory compliance under Indonesian capital market laws.

When do you need this document?

You need an Asset Management Agreement when engaging a professional asset management firm to handle your investment portfolio in Indonesia. This includes situations where you're a high-net-worth individual seeking diversified investment management, a corporate entity requiring professional fund management, or an institutional investor like a pension fund or insurance company outsourcing investment decisions. The agreement is also required when establishing investment mandates with specific objectives, such as capital preservation, income generation, or growth-oriented strategies. Indonesian regulations mandate this document for any formal asset management relationship, making it essential for compliance with OJK requirements.

Key legal considerations

The agreement must clearly define the scope of the asset manager's authority, including which investment decisions they can make independently and which require your prior approval. Investment objectives and risk tolerance levels should be explicitly stated to prevent disputes over portfolio performance or strategy deviations. Fee structures, including management fees, performance fees, and any additional charges, must be transparently documented with calculation methods clearly outlined. The agreement should establish detailed reporting requirements, specifying frequency and content of performance reports, portfolio statements, and compliance updates. Termination clauses are crucial, covering notice periods, asset transfer procedures, and final settlement processes. Additionally, the document must address confidentiality obligations, potential conflicts of interest, and the asset manager's fiduciary duties under Indonesian law.

Legal requirements in Indonesia

Under Indonesian law, Asset Management Agreements must comply with Law No. 8 of 1995 on Capital Markets and OJK Regulation No. 43/POJK.04/2015 governing Investment Managers. The asset management company must hold valid licenses from OJK and demonstrate compliance with minimum capital requirements and professional standards. The agreement must incorporate customer due diligence provisions under Law No. 8 of 2010 on Prevention and Eradication of Money Laundering, including know-your-customer procedures and ongoing monitoring requirements. Investment guidelines must align with OJK-approved investment policies and risk management frameworks. The document should reference the role of third-party custodians when required and ensure compliance with foreign investment restrictions where applicable. Regular reporting to OJK and maintenance of proper books and records are mandatory obligations that must be reflected in the agreement terms.