Emerging Markets
by Jon Harden on July 26, 2019

SoftBank launching second Vision Fund

The world-famous Japanese conglomerate, SoftBank group s planning on creating a second Vision Fund, which would be a new investment fund created by the group in order to participate in the global markets. The announcement was made in Tokyo, under 24 hours ago. The announcement is not a surprise since the last project that the company undertook saw great success among international investors. This time around, the fund will be looking for investments that would amount to about  $108 billion, form companies that include Apple, Microsoft and the sovereign wealth fund of Kazakhstan. This investment fund is anticipated to be just as successful as the previous project, although the investment concentration of this one would be more concerned with things other than the technology sector, which the previous fund found to be more interesting.

Changing strategies

The initial wealth fund project conducted by SoftBank was financed by the group itself, in conjunction with the Abu Dhabi and Saudi wealth funds. The majority of the investment that the fund conducted was related to tech. Specifically, special interest was expressed by the said fund in Uber and WeWork. The investments turned out to be quite successful, and the returns that the investors saw on their investments was highly appreciated. The last fund was worth $97 billion at the beginning.

The changes this time around are going to be related to the investors, the size of the investment and the specific investments that the funds are going to be making. While the company is still going to be looking at technology startups, it is going to be avoiding some of the more established ones, such as Uber and Lyft. The goal this time would be to set up an investment portfolio that is composed mostly of some of the freshest newcomers to the markets.

The previous supporters of the investment fund, including the Saudi and Abu Dabi wealth funds, are not currently included in the investors. But, SoftBank did not deny that the company is in talks with the funds, as they have expressed a certain level of interest in working with the fund to consolidate investment and better their portfolios. The experience from last time seems to be showing that there is a lot of potential in working with SoftBank established investment funds.

The announcement and the surrounding discussions

The announcement was made in Tokyo, in a regulatory filing to the Tokyo Stock Exchange. The company said that they would be committing 38 billion of their own funds in order to get the ball rolling. After the announcement, many started questioning whether more investors would be involved in the process. The representatives of the company mentioned the ones we have already spoken about and went on to say they were still in talks with other potential investors into the fund. They also sai that while they are assuming that there are many investors who are interested in working with the company, they were not going to make assumptions into statements. Such things could have negative effects and result in causing disinterest from other potential investors, which is something they do not want to cause.

The introduction of the Vision Fund 2 will be one of the most important occurrences on the international markets. After a year of discussions, the Fund will be coming into a singular shape and will become a force that many tech startups will find to be important to speak to when gathering initial investment.

By Jon Harden

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