SoftBank raised almost $100bn for its first Vision fund back in 2016 and invested three-quarters of it showing a slight paper profit in its latest results to the end of September.
This would usually be seen as impressive given the usual J-curve in venture capital funds where the money initially invested takes time to reap profitable returns and eventually achieving multiples if it is a top-tier fund over at least a decade.
SoftBank’s relative unpopularity for its second fund, which has only raised internal capital, stems from its massive bet on WeWork, which was whacked by covid-19 on its tenancy but now showing signs of life in China and countries opening up again and as vaccinations can be delivered to people hopefully early next year.
Estate Kathleen McCarthy, global co-head of real estate at alternative investments firm Blackstone Group, told news provider Term Sheet that “WeWork was really onto something that employers were looking for.”
She added: “As landlords, we need to ammenitise buildings and also think about the constellation of our tenants so they complement one another.”
If SoftBank, therefore, can get through the next few quarters and covid recovery for the economy even its largest bet might start to move its valuation back in the right direction.
To give it time for this to happen, SoftBank has since March sold about $90bn of its holdings including stakes in US telecoms operator T-Mobile, China-based onlie retailer Alibaba and, most recently, UK chip designer Arm for up to $40bn.
But it has reshaped its board with Rajeev Misra, head of the Vision fund, Marcelo Claure, its chief operating officer, and Katsunori Sago, its chief strategy officer, leaving the SoftBank board.
While a slight demotion, retaining its people and its focus has been powerful signs of strategic longevity even with tactical changes.
