SoftBank’s second fund launches with pledges of $108bn

Special SoftBank’s second fund  launches with pledges of $108bn
An animatronic model of SoftBank’s famous dog, known as Otosan, which stands in front of the company’s outlet in Ginza, in central Tokyo. (Shutterstock)
Updated 27 July 2019

SoftBank’s second fund launches with pledges of $108bn

SoftBank’s second fund  launches with pledges of $108bn
  • Saudi Arabia’s PIF discusses investment in VF2, which could reach $150bn

DUBAI: SoftBank Group, the Japanese conglomerate run by entrepreneur Masayoshi Son, has officially announced the launch of Vision Fund 2 (VF2), an investment mega-fund aimed at the fast-growing global sectors of high technology and artificial intelligence.

As revealed exclusively in Arab News earlier this week, VF2 will be bigger than the $97 billion raised in the first fund.

In a press release, SoftBank said the amount already pledged has reached around $108 billion via a new set of “limited partners” — investors — including Apple, Microsoft, and a wide range of Japanese financial institutions. SoftBank itself is putting up $38 billion.

The Public Investment Fund (PIF) of Saudi Arabia and Mubadala of the UAE — the biggest investors in the first fund, with a commitment of $60 billion between them — were not named in the list of partners for VF2.

However, it is believed that both are considering big contributions to the fund, which could reach as much as $150 billion when it finally closes to investors next year.

Negotiations are continuing between the PIF and SoftBank over the extent of the Saudi contribution to VF2.

A PIF spokesman declined to comment on the negotiations, but stressed the “close relationship” between SoftBank and Saudi Arabia.

Rajeev Misra, CEO of SoftBank Investment Advisers, which runs the Vision funds, told Arab News that relations between the funds and the PIF are extremely close. “Our interests align. We stand by them shoulder to shoulder,” he said.

The first Vision Fund grew out of meetings between Son and Mohammed bin Salman, the Saudi crown prince and architect of the Kingdom’s Vision 2030 strategy to transform the Saudi economy away from oil dependency.

The extent of Saudi participation in VF2 will depend partly on how quickly Misra and his team can deliver returns to the PIF from VF1.

He said there are a number of initial public offerings lined up by the end of this year, which will deliver billions of dollars to the original investors.

One of the new investors in VF2 is the sovereign wealth fund (SWF) of Kazakhstan. It is believed that other SWFs — from Oman and Kuwait — are in talks with SoftBank over participation in VF2.

Misra said he is committed to creating tens of thousands of new hi-tech jobs in Saudi Arabia, and around a dozen of the fund’s portfolio partners will open offices in the Kingdom in the coming months.

VF2 is also involved in the NEOM project to build a hi-tech megacity in the northwest of the Kingdom.