MOSCOW, August 6 — Dow Jones. SoftBank Corp. in July, it seems, have successfully completed financial maneuver: she announced the creation of a technology investment Fund with a capital of 108 billion dollars. Funds in the capital of the Fund is expected to make such companies as Apple and Microsoft Corp.
This Fund may become the world’s largest technology Fund. However, the numbers are actually not as impressive as it might seem.
SoftBank in a press release pointed out that signed agreements of intent with 12 companies, whose names are already known, as well as “major players from Taiwan”. Taking into account their possible investments and calculated capital Vision Fund 2, which “had reached approximately 108 billion dollars.”
Informed sources believe that the calculation of this value SoftBank took into account the contributions of potential investors who were not named in her public statements. According to them, the announced figure includes debt and securities, reminiscent of the debt instruments, that is, the generally accepted concept of “capital” in this case is somewhat blurry.
The Wall Street Journal conducted a rough calculation and found that most of the investments of $ 70 billion promised by the companies, must ensure that Vision Fund 2 is not mentioned investors and the remaining 38 billion dollars pledged itself to SoftBank.
As noted by some potential investors, discuss investment for the Fund, announced by SoftBank, are still at an early stage. This contrasts with the usual in the venture capital field practice according to which a dollar of the Fund is declared only when investors promised to invest in it. According to one source, one of the companies that signed with the SoftBank agreement of intent did not specify how much she is willing to contribute to the Fund.
Funds raised SoftBank has attracted considerable interest among players in the technology sphere, because the first Vision Fund, which is the largest technological investment Fund in the world with a capital of nearly 100 billion dollars, changed the situation for young companies. Within two years of its existence, it has invested billions of dollars in such companies as Uber Technologies Inc. and office space provider WeWork Cos., contributing to the growth of their assessments and encourage other venture firms to create their own megafono.
Now the funds available for investment first Vision Fund, runs out. This increases pressure on SoftBank, which has to again accumulate the funds to keep up with the fast pace of transactions specified by the company’s founder and initiator of the Fund Masayoshi Sleep.
If SoftBank will be able to raise 108 billion dollars and place them as quickly as funds the first Fund, this is likely to lead to a further drastic change in the Silicon valley. The company said that the Vision Fund 2 will focus on artificial intelligence and to achieve “acceleration of the revolution of artificial intelligence through investment in market leading technology companies with high growth rates”.
However, there remain important questions about how the capitalization of the Fund, and also about how many investors (and which ones) will take part in it, said sources.
A number of investors are going to Finance the bulk of their obligations to the Fund through some form of debt instruments, said some of the sources. This is an unusual way of raising funds for the investment Fund, although the first Vision Fund also uses one of the forms of capital, reminiscent of the debt — preferred shares with fixed yield of 7%.
SoftBank rushed to sign Contracts of intent and announce the creation of a Vision Fund 2, without waiting for the completion of the negotiations, the sources said.
In particular, negotiations with the sovereign Abu Dhabi Fund, Mubadala Investment Co., which is a major investor of the first Vision Fund. According to one source, this time Mubadala may invest up to 25 billion dollars against 15 billion dollars for the first Vision Fund. The representative of Mubadala did not respond to a request for comment.
Potential investors Vision Fund 2 will follow closely the results of the first Fund. As stated by the Sleep, the yield of this Fund for the fiscal year to March was 29%. For the most part it was about unrealized income from non-public companies, which are difficult to assess.
Of the five companies in the portfolio Vision Fund, to date, made public, and four are trading below IPO price or the price on the first trading day. The price of the stock Uber, one of the largest investment objects Vision Fund, on Monday fell more than 3% to 39.05 USD amid falling market as a whole. Paper this company trading below its IPO price, which amounted to $ 45.
In General, companies that, as stated by SoftBank, has signed with it the Memorandum of understanding is unlikely to make its stock more than a few tens of billions of dollars, according to approximate calculations the WSJ. This estimate is based on data from informed sources, the estimates and the report in the Nikkei newspaper that some Japanese participants to invest in the Fund the millions, not billions of dollars.
The authors of Phred Dvorak, [email protected] Liz Hoffman, [email protected], Mayumi Negishi, [email protected]; translation PRIME; +7 (495) 645-37-00; dowjonesteam @ 1prime.biz
Dow Jones Newswires, PRIME
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