Abu Dhabi, UAESaturday 14 December 2019

Saudi Arabia's PIF in talks as Apple and Goldman Sachs join SoftBank's Vision Fund II

Japanese telecoms firm 'preparing to pour $40bn into a sequel fund after landing investors'

Ken Miyauchi, president and chief executive officer of SoftBank speaks during the SoftBank World 2019 event in Tokyo. The telecom giant is about to free up billions of dollars in debt following the T.Mobile-Sprint tie-up allowing it to push ahead with its Vision Fund ambitions. Bloomberg
Ken Miyauchi, president and chief executive officer of SoftBank speaks during the SoftBank World 2019 event in Tokyo. The telecom giant is about to free up billions of dollars in debt following the T.Mobile-Sprint tie-up allowing it to push ahead with its Vision Fund ambitions. Bloomberg

Saudi Arabia's Public Investment Fund (PIF) is in discussions with SoftBank to invest in a sequel to its $100 billion (Dh367bn) megafund, sources close to the sovereign wealth fund told The National.

The Japanese telecoms company is preparing to pour $40bn into the new Vision Fund II after landing capital from investors like Apple, Goldman Sachs and Kazakhstan’s government, the Wall Street Journal reported.

SoftBank’s board is meeting on Thursday to approve the investment, the newspaper reported, citing people familiar with the matter. The second fund comes as US regulators are set to approve the merger of telecom giants Sprint and T-Mobile US, a tie-up that will free SoftBank of $40bn of debt from its Sprint holding.

The Vision Fund was rolled out two years ago with a majority of the cash invested by Saudi Arabia and the UAE. PIF is the biggest single investor, with $45bn in the megafund.

Mubadala, Abu Dhabi's strategic company, pledged $15bn in May 2018 as part of a strategy to increase investments in high-growth sectors, such as technology, to reduce dependence on oil revenues.

Mubadala and PIF declined to comment on whether it would participate in the Vision Fund's sequel fund when contacted by The National.

In June, SoftBank founder Masayoshi Son said the Vision Fund has invested $64.2bn in 71 companies, generating a return of 62 per cent with investments in start-ups like co-working giant WeWork and India's budget hotel chain Oyo.

At the time of Mr Son's comments, Sanford C. Bernstein & Co analyst Chris Lane outlined the investments so far in terms of geography and sector in a research note, reported by Bloomberg. The fund, he wrote, has put 46 per cent of its money in the Americas, 40 per cent in Asia and 14 per cent in Europe, the Middle East and Africa.

He estimated that 44 per cent of the money has gone into transportation and logistics, including ride-hailing giants Uber and Didi Chuxing. The next biggest sectors are ‘frontier’ tech, consumer and real estate/construction.

SoftBank is the second-biggest telecommunications company in Japan with cloud services, mobile data plans and network services, on top of its massive investments in other technology and communications firms.

In addition to Goldman and Apple (which invested in the first fund), SoftBank has secured backing from Standard Chartered, the emerging-markets bank, WSJ reported. SoftBank is also reportedly in talks with Microsoft. Kazakhstan’s sovereign-wealth fund said it would invest following a visit from Vision Fund executives earlier this month.

Updated: July 26, 2019 02:34 AM

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