Danantara Indonesia will invest $20 billion in a wide range of projects from metal processing to artificial intelligence, President Prabowo Subianto said.

Washington may not have a sovereign wealth fund, but almost half the U.S. states do. Indeed, the earliest precursor of a national sovereign wealth fund was established in the United States: in 1803, Ohio created a land trust to finance public education in the state.

A sovereign wealth fund often serves as a vehicle to invest a government’s budget surplus. The U.S. doesn’t have that luxury.

Indonesia on Monday launched a new sovereign wealth fund that will aim to manage state assets worth more than $900 billion as President Prabowo Subianto looks to turbo-charge growth in Southeast Asia's biggest economy.

Effectively, it's a government-run hedge fund that invests in assets like stocks, bonds, real estate, and infrastructure. It's a fairly straightforward process: the government provides funds, and the SWF invest it into risky assets to try to earn profits. This is the same as any investment company, only that its sole investor is the government.

President Donald Trump signed an executive order last week to create a sovereign wealth fund, similar to those of nations in the Middle East, Europe and Asia. The funds, which typically use surplus wealth, operate by making direct investments (like stock, bonds, real estate, equity funds, etc.) with government dollars.

Not to be outdone, the Philippines created its own state-owned investment vehicle, the Maharlika Wealth Fund. After a few years of figuring out key details, such as how it would be structured and funded, Maharlika is now operational and preparing to make its first investment later this year.

Indonesian president Prabowo Subianto has launched plans for a new sovereign wealth fund aimed at supporting his strategic projects and boosting the country’s growth – but it’s already raising concerns of transparency and political interference.