TOKYO: SoftBank Group Corp’s Vision Fund is preparing to launch a blank cheque acquisition company and will outline plans in the next two weeks, a source familiar with the matter said, following similar reported comments by the fund’s head Rajeev Misra.
SoftBank is looking to attract outside investment and may put its own capital in the vehicle whose size is undetermined, the person said, declining to be identified as the information is not public.
Misra revealed plans for the vehicle at a conference on Monday hosted by billionaire Michael Milken’s think-tank the Milken Institute, media reported. SoftBank declined to comment but Misra’s remarks were reported by U.S. media.
The launch would see SoftBank joining the fashion for special purpose acquisition companies (SPAC) – shell vehicles that raise money in an initial public offering (IPO) before merging with a private company.
Such vehicles are being used to take a record number of companies public, bypassing the traditional IPO.
“These are late-stage investments so potential returns may not be as high but the risk profile should be lower and liquidity higher as investments quickly enter the public domain,” said Kirk Boodry, analyst at Redex Research.
SoftBank is flush with cash as Chief Executive Masayoshi Son sells down core assets, leading to speculation over his future investment plans.
The group has been biding its time since efforts to raise capital for a successor to its $100 billion Vision Fund ran aground following poor performance at the fund.
The first fund invested in many of the highest profile late-stage startups using its overwhelming firepower to push for faster growth and shaking up the venture capital industry.
SoftBank has been investing on a smaller scale with its own money via a second fund amid a lack of larger targets and as the funding environment is dampened by the COVID-19 pandemic.
The group has used its mounting cash reserves to take positions in listed U.S. tech firms and has a growing number of portfolio companies going public after the IPO window reopened.
SoftBank’s shares rose as much as 1.6% in morning Tokyo trading before falling 0.6%. Shares are up more than 160% since March lows. – Reuters