(Bloomberg) – SoftBank Group Corp. is targeting investments of more than $ 10 billion in public shares as part of a new arm management arm, beyond the initial stakes that founder Masayoshi Son shared on Tuesday, people familiar with the initiative said.
The tally could reach the tens of billions, said one of the people, who all asked not to be identified because the plans are private.
Son, the chief executive officer, unveiled the investment arm in a conference call to discuss revenue on Tuesday. He said the unit has about $ 555 million in capital. However, the amount is seen as a placeholder, said people familiar with the project; 555 is slang in Japanese gaming culture and means “go, go, go.”
The asset management team is led by Akshay Naheta, a senior vice president in Abu Dhabi, the people said. The group has amassed quiet multibillion-dollar offices in U.S. Big Tech companies in recent months, the people said.
On Tuesday, Son said that SoftBank received holdings in some of the so-called FAANG shares. FAANG refers to a group of five major tech companies: Facebook Inc., Amazon Inc., Apple Inc., Netflix Inc. and Google, whose parent company Alphabet Inc. is
The Japanese company did not disclose the size of these positions. The investments were made with financing structures that could prevent SoftBank from appearing in public records as a direct shareholder, the people familiar with the initiative said.
A representative for SoftBank declined to comment. “As an investment company, we need to explore different angles and scope. But our focus is still on companies driving the information revolution, “Son said during the revenue presentation.” This is the goal of our company. “
In recent years, SoftBank has established itself as a champion of innovative startups, led by its $ 100 billion Vision Fund. That strategy faltered after WeWork and several other high-profile flameouts. But SoftBank’s handling of public shares has generated some gains over the past three years. It benefited from investments Charter Communications Inc. in early 2018 and in US chip designer Nvidia Corp., which was worth 398 billion yen when it was sold last year.
Less successful was a complex investment in the now infamous German payment company Wirecard. The bet benefited select SoftBank employees and sovereign wealth fund Mubadala, an investor in the Vision Fund, but the collapse of Wirecard in recent months has caused analysts to ignore the nature of the investment.
The development of a car for public shares was driven in part by a longing desire by several executives at SoftBank to pursue asset management. Following the acquisition of $ 3.3 billion from Alternative Assets’ Fortress Investment Group LLC manager, SoftBank also plans to acquire a stake in Swiss Re, the second largest insurer in the world.
SoftBank is in the process of charging 4.5 trillion yen in legacy assets, including holdings in Alibaba Group Holding Ltd., T-Mobile US Inc. and its domestic telecom unit. Some of the capital raised will fund poor management, the people said. SoftBank said it will own 67% of the group management, and Son will own the rest personally.
The new unit reflects Son’s renewed ambitions. The founder had said in May that SoftBank would probably not secure outside investors for a second Vision Fund after problems with the first. But in the upbeat financial results Tuesday, Son showed readiness to accelerate a business-wide shift from telecom to investing. “Our strategy has not changed,” Son said. “We are still planning on hunting unicorns with Vision Fund two, three and so on.”
SoftBank’s investments in FAANG shares are buoyed by a tech rally in the market. Uber Technologies Inc. hit 11% last quarter after tumbling at first and is now trading at close to the $ 33 price that SoftBank paid in early 2018. The performance gives a strong impetus to the Vision Fund portfolio, which heavy weight is in the direction of ride-healing companies, including Didi Chuxing in China, Grab in Southeast Asia and Ola in India.
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