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MarketScreener Homepage  >  Equities  >  Tokyo  >  SoftBank Group Corp    9984   JP3436100006

SOFTBANK GROUP CORP

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SoftBank : Saudi, Abu Dhabi and Oman said to be in talks with SoftBank over new $100bn fund

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06/12/2019 | 09:12am EDT

SoftBank Group is working with Goldman Sachs Group to raise money for its second $100 billion technology investment fund and will begin formally soliciting investors in July, according to people familiar with the matter.

SoftBank and its bankers, which also include Centricus and Cantor Fitzgerald, have held preliminary talks with sovereign wealth funds from Singapore, Saudi Arabia, Abu Dhabi, Kazakhstan and Oman, said the people, who asked not to be named because the matter is private.

SoftBank may contribute $40 billion to $50 billion, up from $28 billion in the first fund, because of what founder Masayoshi Son sees as potentially lucrative returns, the people said. The goal is to close the fund by March 2020, one person said.

While Son has made no secret of his intention to raise more capital after the first Vision Fund, there has been heated debate over whether he would be able to create another $100 billion behemoth.

The initial fund was the largest ever of its kind, fuelling concern it would drive up start-up valuations and hurt returns. Adding evidence to the argument was the initial public offering flop by Uber Technologies, one of the fund’s highest-profile investments.

Yet SoftBank and its bankers have gained confidence in their effort after they were approached by several sovereign wealth funds and received positive early responses from other investors. The talks are preliminary and the fund may not close as intended next year or may raise less money than anticipated, the people said.

“Because we have made great results and performance in SoftBank Vision Fund I, a majority of investors have shown high interest in Vision Fund II,” Son said last month on a conference call to discuss earnings. “On top of that, many investors around the world showed their interest to be part of Vision Fund II.”

SoftBank’s representatives declined to comment on the details for the second fund.

Saudi dominant

The first Vision Fund was dominated by Saudi Arabia, which contributed $45 billion of the total. Mohammed bin Salman, the crown prince and chairman of the nation’s sovereign wealth fund, told Bloomberg in October that he would pledge the same amount of money for the next Vision Fund.

However, it is unlikely the Public Investment Fund will invest such a large amount the second time around, in part because SoftBank has been keen to broaden its investor base, the people said.

Saudi Arabia and the crown prince faced outrage last year after the murder of government critic Jamal Khashoggi. Analysts such as Sanford C. Bernstein & Co.’s Chris Lane worked through the financial implications if SoftBank were to take little or no money from the Saudis in the future.

PIF declined to comment on its plans for the second Vision Fund.

Singapore’s GIC, Kazakhstan’s sovereign fund and financial firms in Taiwan may each invest $2 billion or more in the new fund, while Oman may put in a smaller amount, one person said. GIC declined to comment, while Kazakhstan and Oman didn’t respond to requests for comment.

London-based Centricus, formed by former Deutsche Bank AG banker Nizar Al Bassam and former Goldman partner Dalinc Ariburnu, helped with fundraising and advised on the first Vision Fund. Rajeev Misra, who oversees the fund, is a former Deutsche Bank executive.

Son disclosed that the first Vision Fund has earned his company 62% returns so far after making 71 investments for a total of $64.2 billion. Those returns have been boosted because part of the capital contributed by other investors is in fixed-return preference shares that are capped at 7%. In a research report, Bernstein’s Lane explained that limited partners made 45% on their common shares and a blended return of 29% including the preference shares.

Son said in an interview with Bloomberg News last year that he would like to raise a new Vision Fund every two or three years because he sees so many opportunities in artificial intelligence and other cutting-edge technologies. He said in May that the second fund would be about the same size as the current Vision Fund.

The first fund has taken stakes in many of the world’s leading technology companies, including Uber and WeWork Cos. Ride-hailing is the single biggest segment, including stakes in China’s Didi Chuxing, India’s Ola and Singapore’s Grab.

”My heart and mind are full of energy for the Vision Fund, taking up 97% of my brain,” Son said in May.

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(c) 2019 CNPHUB - All Rights Reserved Provided by SyndiGate Media Inc. (Syndigate.info)., source Middle East & North African Newspapers

Stocks mentioned in the article
ChangeLast1st jan.
SOFTBANK GROUP CORP 0.17% 4624 End-of-day quote.-33.99%
UBER TECHNOLOGIES INC -3.61% 32.6 Delayed Quote.0.00%
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Financials (JPY)
Sales 2020 9 719 B
EBIT 2020 1 257 B
Net income 2020 1 448 B
Debt 2020 10 457 B
Yield 2020 0,82%
P/E ratio 2020 6,29x
P/E ratio 2021 14,7x
EV / Sales2020 2,06x
EV / Sales2021 2,13x
Capitalization 9 575 B
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Mean consensus BUY
Number of Analysts 17
Average target price 7 131,63  JPY
Last Close Price 4 624,00  JPY
Spread / Highest target 129%
Spread / Average Target 54,2%
Spread / Lowest Target 30,8%
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Managers
NameTitle
Masayoshi Son Chairman, President & Chief Executive Officer
Raul Marcelo Claure Chief Operating Officer & Director
Norikazu Oba Manager-Finance & Planning
Tadashi Yanai Independent Outside Director
Ken Miyauchi Representative Director & Vice President
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