Softbank is preparing to buy more than $10 billion in listed company shares through a new asset management unit, far more than its founder, sun Zhengyi, disclosed to shareholders on Tuesday, according to people familiar with the matter.
Softbank CEO sun Zhengyi said on a financial report conference call on Tuesday that the investment department would be established with an initial capital of about 555 million US dollars. However, people familiar with the matter said that the number is only a “place holder” and “555” means “come on, come on, come on” in Japanese game culture.
people familiar with the matter said the asset management team would be headed by Akshay naheta, the company’s senior vice president in Abu Dhabi. The team has quietly moved into billions of dollars in U.S. technology giant stocks in the past few months.
Softbank has bought some of the shares of faang, Mr. Sun said on Tuesday. Faang refers to Facebook, Amazon, apple, Netflix and Google. The size of these positions was not disclosed. People familiar with the matter said the investments used a special financial structure to avoid exposure of Softbank as a direct shareholder.
a Softbank spokesman declined to comment. “As an investment company, I need to explore and expand in many aspects,” Sun said on the conference call. But our focus is still on the companies that drive the information revolution. This is the mission of our company. ”
in recent years, Softbank has shaped itself as a supporter of an innovative start-up company. The most noticeable experience is the $100 billion vision fund. However, after the shared office venture Wework and several other well-known start-ups have stalled, the strategy is struggling.
However, Softbank’s shares in some listed companies have brought it a lot of profits in the past three years. They profited from their investment in Charter Communications in 2018, as well as their stake in NVIDIA, which was worth y398 billion when it was sold last year.
but less successful investments include investments in wirecard, the now notorious German payment company. Some Softbank employees and sovereign wealth fund Mubadala (an investor in vision Fund) benefited from the investment, but the collapse of wirecard in recent months has prompted analysts to question the nature of the investment.
the reason why Softbank established such a listed company’s stock investment department, to a certain extent, stems from the fact that many senior executives of the company have always wanted to develop asset management business. Softbank is also considering buying shares in Swiss Re, the world’s second-largest reinsurance company, after buying fortress investment group, an alternative asset management company, for $3.3bn.
Softbank is divestiture of 4.5 trillion yen of old assets, including its holdings in Baba group shares, T-Mobile’s U.S. and local telecom businesses. Some of the capital will be used to support asset management, people familiar with the matter said. Softbank said it would own 67 per cent of the asset management unit, with the remainder privately owned by Mr. Sun.
this new Department also shows that sun Zhengyi’s ambition is burning again. He said in May that Softbank was unlikely to win outside investors for the second vision fund after it had problems with the first vision fund. But after Tuesday’s better than expected financial results, Mr. Sun said he was ready to shift the company’s direction from telecommunications to investment. “Our strategy has not changed,” Mr. Sun said. “I still plan to hunt unicorns with the second, third and more vision funds.”
Softbank’s investment in faang was boosted by the overall rebound in technology stocks. Uber’s share price rebounded 11% in the second quarter after a sharp fall in the first quarter and is now close to the $33 Softbank paid in early 2018. This has given the vision fund a big boost, as it has a large stake in many online car Hailing companies such as didi in China, grab in Southeast Asia and Ola in India.