Time: May 15, 2018
TOKYO: SoftBank Group Chief Executive Masayoshi Son, founder of the world’s largest private equity fund, said on Tuesday a second Vision Fund would be set up in the near future, with funds from investors in the first venture or institutions.
Son’s reputation as a visionary investor has attracted more than $93 billion to his technology investment vehicle, as of last May, with a second Vision Fund potentially further upending the world of dealmaking.
“Vision Fund 2 will definitely come,” Son told a conference in Tokyo. He said the fund would not be launched in the next six months but would be “in the near future.” Son did not say how big the new fund could be.
With the first Vision Fund and a smaller affiliate already investing about $30 billion, and about $13 billion worth of SoftBank’s stake in ride-sharing firms set to be transferred into the fund, attention is turning to future investment plans.
Son said the new fund could see a return of investors in the original Vision Fund, which include the sovereign wealth funds of Saudi Arabia and Abu Dhabi, Apple Inc. and Hon Hai Precision Industry Co. Ltd. (Foxconn).
“I think our existing partners are extremely happy about how we are progressing,” he said.
Institutional investors are also showing interest, Son added. “Now we are building our track record so they are showing their interest,” he said.
SoftBank has held investments for an average of 13.5 years, Son said, with an early punt on Alibaba Group Holding Ltd. founder Jack Ma helping make his name as a savvy investor.
Vision Fund was set up to invest in companies employing emerging technologies such as artificial intelligence and connected devices, with companies from office-sharing firm WeWork to dog walking app Wag receiving funds.
Son said he was able to make investment decisions within the first few minutes of meetings with start-up founders, and sometimes encourages them to take more cash than they originally were seeking to accelerate growth plans.
“Yoda says listen to the Force,” said Son, who is fond of quoting the diminutive Jedi master from the Star Wars movie franchise. “Don’t think, you feel it.”
SoftBank’s investments in late-stage start-ups — Son described himself as a “unicorn hunter,” referring to the industry term for start-ups whose valuation exceeds $1 billion, is widely seen as contributing to a spike in start-up valuations.
“You have to think unicorn-type businesses now have another reason not to go public,” Andrew Brown, head of private equity research at Mercer, said of Son’s plan to expand the number of funds.
Japan’s three megabanks — Mitsubishi UFJ Financial Group, Sumitomo Mitsui Financial Group and Mizuho Financial Group — are investing in the first Vision Fund, according to a banking source briefed on the matter.
The Financial Times, which first reported that investment, said last week Germany’s Daimler AG, Oracle Corp. co-founder Larry Ellison and the sovereign wealth fund of Bahrain were also committed to investing, and would take the fund to its $100 billion goal.