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SoftBank’s goal is to exceed $10 billion in public investment



Bloomberg-People familiar with the matter said that as part of the new asset management unit, SoftBank Group Corp.’s goal is to invest more than $10 billion in public shares, far more than the founder Masayoshi Son outlined on Tuesday Initial shareholding given to shareholders. .

A person familiar with the matter said that the total could reach tens of billions. Since the plan is private, all these people asked not to be named.

CEO Sun Zhengyi (Son) announced the investment department on a conference call to discuss the benefits. He said that the sector’s capital is approximately US$555 million. People familiar with the matter said, however, the payment was treated as a placeholder. 555 is a term in Japanese game culture, meaning “go, go, go”.

People familiar with the matter said that the asset management team is led by Akshay Naheta, Abu Dhabi’s senior vice president. People familiar with the matter said that in the past few months, the group has been quietly accumulating billions of dollars in shares of major US technology companies.

Sun Zhengyi said on Tuesday that SoftBank has acquired some so-called FAANG stocks. FAANG refers to a group of five large high-tech companies: Facebook Inc., Amazon Inc., Apple Inc., Netflix Inc. and Google. Its parent company is Alphabet Inc..

The Japanese company did not disclose the size of these positions. People familiar with the matter said that these investments are made through financing structures, which prevents SoftBank from appearing in public files as a direct shareholder.

A representative of SoftBank declined to comment. “As an investment company, we need to explore various angles and scopes. But we still focus on companies that promote the information revolution.” Son said in the earnings report. “This is the purpose of our company.”

In recent years, under the leadership of its $100 billion Vision Fund, SoftBank has portrayed itself as the champion of innovative start-ups. After WeWork and several other high-profile strikes, this strategy failed. But in the past three years, SoftBank has achieved some victories in trading with public stocks. It profited from the investment of Charter Communications and American chip designer Nvidia Corp. in early 2018, which was valued at 398 billion yen when it was sold last year.

Less successful is the complex investment in Wirecard, the now famous German payment company. The bet has benefited some of SoftBank’s employees and the Vision Fund’s investor sovereign wealth fund Mubadala, but Wirecard’s collapse in recent months has caused analysts to question the nature of the investment.

The development of public offering tools is partly driven by the long-term desire of various SoftBank executives to pursue asset management. After acquiring Fortress Investment Group LLC, an alternative asset management company, for US$3.3 billion, SoftBank is also considering buying shares in Swiss Re, the second largest reinsurance company in the world.

SoftBank is divesting 4.5 trillion yen in legacy assets, including shares in Alibaba Group Holdings Ltd., T-Mobile US Inc. and its domestic telecommunications division. People familiar with the matter said that part of the funds raised will be used for asset management. Softbank said it will own 67% of the asset management group, and Sun Zhengyi will personally own the remaining assets.

The new unit reflects Sun Zhengyi’s ambition. The founder said in May that it is unlikely that SoftBank will win external investors for the second Vision Fund after it has problems. But in the optimistic financial performance on Tuesday, Sun Zhengyi expressed his willingness to accelerate the company’s transformation from telecommunications to investment. Sun said: “Our strategy has not changed.” “We still plan to hunt for unicorns with the second and third class of the Vision Fund.”

Softbank’s investment in FAANG stock was boosted by the market’s technical rebound. After experiencing a decline in the first quarter, Uber Technologies Inc. rebounded by 11% in the last quarter, and the current transaction price is close to the $33 price that SoftBank paid in early 2018. This performance has greatly promoted the development of the Vision Fund’s investment portfolio, which attaches great importance to ride-hailing companies including China’s Didi Chuxing, Southeast Asia’s Grab and India’s Ola.

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