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Softbank plans to raise US$108bn for Vision Fund 2

BACKERS:Apple Inc and Microsoft Corp are among those expected to contribute capital to the fund, which would be used to invest in cutting-edge technologies

Bloomberg

Softbank Group Corp’s founder Masayoshi Son launched a second Vision Fund, seeking to extend his reign as the world’s most influential technology investor.

The Japanese conglomerate plans to commit US$38 billion to Vision Fund 2 with the goal of raising a total of US$108 billion, Softbank said yesterday.

Apple Inc, Microsoft Corp, Kazakhstan’s sovereign wealth fund and a number of Japanese finance companies are also expected to contribute capital, Softbank said.

If the fund-raising meets that goal, it would be even larger than the first US$100 billion effort.

Son wants to raise a new massive fund every two or three years to take advantage of opportunities he sees in cutting-edge technologies such as artificial intelligence and autonomous driving.

The first Vision Fund has earned 62 percent returns so far after making 71 investments totaling US$64.2 billion, Softbank said last month.

While several of its portfolio companies — Uber Technologies Inc and Slack Technologies Inc — have gone public, profitable exits might still be years away.

The Saudi Arabian Public Investment Fund and Mubadala Investment Co, key partners in the first vehicle, were not listed among the investors in the second fund, but they are still in talks about possible investments, Softbank spokesman Daisuke Sawatake said.

Among the investors in the original Vision Fund, only Apple and Foxconn Technology Group (富士康科技集團) have plans to contribute to the successor so far.

Softbank has also received a memorandum of understanding from Japanese financial firms Mizuho Financial Group Inc, Sumitomo Mitsui Financial Group Inc, Mitsubishi UFJ Financial Group Inc, Dai-ichi Life Holdings Inc, Sumitomo Mitsui Trust Holdings Inc, Daiwa Securities Group Inc and SMBC Nikko Securities Inc.

Other contributors are to include Standard Chartered PLC, an unnamed Taiwanese investor and the fund’s management, Softbank said in a statement.

The original Vision Fund was announced in October 2016, but it took another seven months for its first major closing. Saudi Arabia was a key investor with a US$45 billion contribution, followed by Softbank’s US$28 billion and US$15 billion from Mubadala. Investors also included Qualcomm Inc and Sharp Corp.

While the Saudis acted as a constraint on Son’s power at the original fund, the Japanese billionaire seems set to take a more leading role in its successor.

After decades of building his telecom empire, the 61-year-old might finally have more time to focusing on investing.

He has handed over the day-to-day management of Softbank’s domestic telecom operations, a cash-cow division that went public in December last year, to his long-term lieutenant Ken Miyauchi, and the company’s Sprint Corp unit and T-Mobile US Inc are seeking to merge in the US.

Another question is whether Softbank plans to keep up the pace and scale of investments.

The first fund targeted stakes of more than US$100 million, in just two years amassing a portfolio of 82 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 (滴滴出行), India’s Ola and Singapore’s Grab.

Softbank Group was an investor in 24 of 377 global unicorns, start-ups valued over US$1 billion, data from market researcher CB Insights showed.

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