Market Overview

SoftBank Introduces New $108B Investment Fund

SoftBank Introduces New $108B Investment Fund

Japanese global conglomerate SoftBank Group Corp - ADR (OTC: SFTBY) introduced a mega investment fund that is bigger in scope than its first $100-billion Vision Fund, The Wall Street Journal reported.

What Happened

SoftBank's new megafund, Vision 2, is investing about $108 billion in capital from more than 10 investors, according to WSJ.

The list of confirmed investors includes tech giants Microsoft Corporation (NASDAQ: MSFT) and Apple Inc. (NASDAQ: AAPL), Kazakhstan's sovereign wealth fund and SoftBank itself, which is expected to contribute $38 billion in capital, the publication said. 

Why It's Important

SoftBank's new megafund validates the company's ability to raise large amounts of capital after skeptics doubted the viability of the original fund two years ago, WSJ said. At the time of creation, the initial Vision Fund was the largest single investment fund in the world and "rewrote the rules of venture capital and tech investing," the newspaper said. 

Up until SoftBank's fund, a $100-million investment vehicle was considered large, WSJ said; SoftBank's fund prompted rival venture capital firms to create their own multi-billion-dollar investment vehicles.

SoftBank said it generated a return of 29% on its initial fund, mostly on valuation gains in its holdings, according to WSJ.

The follow-up Vision Fund 2 fund is reportedly attracting a wider and more diverse group of investors. 

What's Next

Other names that are reportedly interested in joining the investment fund include Wall Street bank Goldman Sachs Group Inc (NYSE: GS), WSJ said.

Over-the-counter SoftBank shares were trading higher by 2.73% at $26.48 at the time of publication Friday. 

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