Vision Fund, the $98.6bn fund managed by telecommunications and internet group SoftBank, is looking to secure $4bn in debt financing against its stakes in some portfolio companies, the Financial Times has reported.
The unit has entered discussions with financial services firms including Goldman Sachs to borrow the money which would be used to repay some of its limited partners. Part of the fund’s capital was provided in the form of debt.
The stakes in question are a 12.8% share of ride hailing service Uber, which floated in an $8.1bn initial public offering last month, a 33.4% stake in cancer test developer Guardant Health, which has a market cap of $7bn, and 7.3% share of messaging platform developer Slack, which is set to shortly go public in a direct listing having last been valued at $7.1bn.
Vision Fund will however have to repay a larger amount if the share price of those portfolio companies fall, people directly involved in the deal told the FT. Guardant’s shares are up some 400% on their IPO price in October 2018, but Uber’s are about 9% down since it went public.
The deal is set to be formally signed once Slack lists, an event likely to take place later this month. The news came as a Wall Street Journal report on the weekend stated that some of the limited partners in the first Vision Fund plan to make small or no contributions to any follow-up vehicles.
Saudi Arabia’s Public Investment Fund is among those despite it having supplied $45bn for the inaugural Vision Fund, as is Canada Pension Plan Investment Board, according to people familiar with the matter.
Vision Fund was reported last month to be exploring the option of raising money through an initial public offering of its own while also approaching potential limited partners for a second fund.