Goldman Sachs Group/Bloomberg
SoftBank and its bankers, which also include Centricus and Cantor Fitzgerald, have held preliminary talks with sovereign wealth funds from Singapore, Saudi Arabia as well as Abu Dhabi, Kazakhstan and Oman.
Wednesday 12, June 2019
(Bloomberg) --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.
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 goal is to close the fund by March 2020.
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, fueling concern it would drive up start-up valuations and hurt returns. Adding evidence to the argument was the initial public offering (IPO) 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.
Masayoshi Son, the Chief Executive Officer of SoftBank, 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.”
“On top of that, many investors around the world showed their interest to be part of Vision Fund II,” Son said.
Saudi Arabia contributed $45 billion in the first Vision Fund and in October 2018 Crown Prince Mohammed bin Salman said that he would pledge the same amount of money for the next 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 is expected to put in a smaller amount.