Veiled Vision

SoftBank says that The Public Investment Fund of Saudi Arabia and Softbank will contribute a combined $70 billion to Softbank’s Vision Fund over the next five years.

The amount from Saudi Arabia was not disclosed, although earlier reports have said it could be  $45 billion.

Softbank has said it will contribute $28 billion, some of which  consists of a quarter share in ARM, blught by  Softbank for $31.4 billion, which is valued at $8.2 billion.

It is said that Mubadala of Abu Dhabi has agreed to invest $15 billion and that Apple, Oracle, Qualcomm and Hon Hai  have each said they’ll contribute $1 billion.

It is unclear whether any of this money has been handed over or, like the Saudi investment, is promised over the next five years.

The Vision Fund was announced in October 2016. The start date of  fund was set for January 2017. By then the aim was to have raised $100 billion of committed capital.

Softbank is now saying that pledges to the fund have reached $93 billion and that it aims to reach $100 billion over the next six months.

Having been promised $93 billion so quickly, to expect to take another six months to raise another $7 billion seems pessimistic.

$50 billion of the fund has been earmarked for US investment to create 50,000 jobs, Softbank chairman Masayoshi Son told US President Donald Trump.

According to Japan’s Mainichi newspaper, Softbank “plans to make investments through the technology fund for a project requiring more than 10 billion yen ($90 million) to curb its interest-bearing debts.”

Softbank is carrying debt of $130 billion.

The Vision Fund is being run from London by Rajeev Misra formerly of  the Fortress investment group which Softbank bought for $3.3 billion in February this year. Before the sale to Softbank, Fortress’ shares had fallen 74% since its IPO. Earlier, Misra ran Deutsche Bank’s credit derivatives business.

The Vision Fund’s stated areas of investment interest are the usual things – driverless cars, AI, Deep Learning, IoT etc – where some argue that there is already too much money chasing investment opportunities which has led to absurd over-valuations.


Comments

2 comments

  1. Thanks for that Jamo most interesting. I suppose he’s bound to raise valuations which will piss off VCs but he’s said his main interest is buy-outs – acting as a private equity company rather than a VC.

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