SoftBank Group (SBG) has announced that it will form SoftBank Vision Fund through which it intends to make investments in the technology sector globally. The Fund will be managed in the UK by a subsidiary of SBG and will deploy capital from SBG and investment partners. The Fund will aim to be one of the world’s largest of its kind.
SBG expects to invest at least US $25 billion over the next 5 years. SBG has concluded a non-binding memorandum of understanding (MoU) on October 12, 2016 with the Public Investment Fund of the Kingdom of Saudi Arabia (PIF), under which PIF will consider investing in the Fund and becoming the lead investment partner, with the potential investment size of up to US $45 billion over the next five years. In addition, a few large global investors are in active dialogue to join SBG and PIF to participate in this Fund. The overall potential size of the Fund can go up to US $100 billion.
According to the statement announcing the establishment of the Fund, SBG will use its deep operational expertise and network of portfolio companies in order to add value to the Fund’s investments.
Deputy Crown Prince Mohammed Bin Salman, Chairman of PIF, commented: “The Public Investment Fund is focused on achieving attractive long-term financial returns from its investments at home and abroad, as well as supporting the Kingdom’s Vision 2030 strategy to develop a diversified economy. We are delighted to sign this MOU with SBG given the long history, established industry relationships and strong investment performance of SBG and Masayoshi Son.”
Masayoshi Son, Chairman & CEO of SoftBank Group, commented on the establishment of the Fund as follows:
“With the establishment of the SoftBank Vision Fund, we will be able to step up investments in technology companies globally. Over the next decade, the SoftBank Vision Fund will be the biggest investor in the technology sector. We will further accelerate the Information Revolution by contributing to its development.”
Rajeev Misra, Head of Strategic Finance, SoftBank Group, is leading the Fund project for SBG. SBG has engaged former Deutsche banker Nizar Al-Bassam and ex-Goldman partner Dalinc Ariburnu for the project. PIF also had its own team of experts engaged.
The Saudi Arabian Public Investment Fund (PIF) was established in 1971 to provide financing support for projects of strategic significance to the national economy, and its role has evolved to incorporate a number of different areas. These include holding and managing the government’s stakes in some of Saudi Arabia’s largest and most important blue chip companies. PIF has also set up and managed a number of companies to support innovation, diversification and non-oil sector development within the Kingdom. Furthermore, the institution has been responsible for holding and managing the government’s stake in bilateral and multilateral companies abroad as well as investing selectively in a range of other asset classes internationally.
PIF has gone through major restructuring, and had supervision moved from under the Ministry of Finance to the Council of Economic and Development Affairs, led by Prince Mohammed Bin Salman Bin Abdulaziz, since March 2015. PIF, under the leadership Prince Abdulaziz, has revised its long term investment strategy to coincide with the country’s Vision 2030.