SoftBank's Son hails 'golden eggs' as Vision Fund rallies

TOKYO (Reuters) – SoftBank Group Corp’s Vision Fund unit posted an 844 billion yen ($8 billion) third quarter profit on Monday as Chief Executive Masayoshi Son hailed the bounce back of his investment portfolio.

The profit marks a sea change from a year earlier when high-profile misses such as the flopped IPO of office sharing firm WeWork and the COVID-19 pandemic forced Son to sell assets to stabilise his investing empire.

“Our vision never changed,” Son told a news conference in Tokyo after his company announced its latest results.

But with interest rates at rock bottom, an ebullient market is now driving tech stock gains and a turnaround at the Vision Fund unit.

Son returned to a favoured analogy – that SoftBank is a goose that lays golden eggs by backing fast-growing companies such as Alibaba.

“Golden eggs are not produced by chance,” Son said.

Softbank-backed firms home selling platform Opendoor and food delivery app operator Doordash went public during the quarter.

Softbank said unrealised gains in Doordash amounted to $10.7 billion.

Almost half of the first Vision Fund’s portfolio, which includes a stake in Uber Technologies, was exited or listed at the end of December, offering liquidity to fund backers that include the sovereign wealth funds of Saudi Arabia and Abu Dhabi.

The $100 billion Vision Fund’s 82 investments were valued at $90 billion, compared with their purchase price of $76.3 billion. The fund has also recorded $20.4 billion in gross gains since inception.

Vision Fund 2’s 26 investments were valued at $9.3 billion compared with their purchase price of $4.3 billion.

The fund’s portfolio companies held 28 funding rounds during 2020 with almost all led by investors other that SoftBank, reflecting the appetite for technology startups.

“You wouldn’t say Vision Fund is laying rotten eggs,” Son said.

Softbank’s trading unit SB Northstar disclosed stakes in listed tech stocks including Taiwan Semiconductor Manufacturing Co worth $22 billion at the end of December.

It recorded a 169.8 billion yen loss on its investments during the quarter.

During the third quarter, Softbank Group’s net profit ballooned more than 20 times to 1.17 trillion yen ($11.09 billion). That compared with an estimate of 171 billion yen from four analysts polled by Refinitiv SmartEstimate.

($1 = 105.5000 yen)

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