SoftBank Group Corp Chief Executive Masayoshi Son boasted of delivering “golden eggs” on Monday, after his company’s Vision Fund unit rebounded from a loss to record an 844 billion yen ($8 billion) third quarter profit.
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 the fund backed by the sovereign wealth funds of Saudi Arabia and Abu Dhabi.
Saudi Arabia’s Public Investment Fund (PIF) contributed $45 billion to the Softbank Vision fund and Abu Dhabi’s Mubadala committed $15 billion, making them the major investors in Softbank’s first $100 billion fund.
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. “Golden eggs are not produced by chance,” he added, returning to a favoured analogy that describes SoftBank as a goose that backs fast-growing companies such as Alibaba that are its golden eggs.
One of Japan’s wealthiest people, Son is viewed as a maverick in a business culture that generally eschews risk taking. Rock bottom interest rates and frothy markets that have driven tech stock gains have helped the turnaround at his Vision Fund unit.
Softbank-backed firms that went public during the quarter include selling platform Opendoor and food delivery app operator Doordash, with unrealised gains in the latter totalling $10.7 billion. Son, who was dressed in a white turtleneck and dark suit, said he had turned to back-to-back online meetings to run his investing empire during the pandemic.
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 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. SoftBank is currently the fund’s only investor.
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, who waved his arms like a music conductor standing before an animation of golden eggs emerging from a cartoon goose.
Softbank’s trading unit SB Northstar, which has been investing the group’s cash reserves, disclosed stakes in listed tech stocks including American Despository Receipts in Taiwan Semiconductor Manufacturing Co worth $22 billion at the end of December.
The unit booked a $2.7 billion derivative loss during the quarter. Son said SB Northstar’s performance has improved since the start of the year and that it is still in a trial phase.
Chinese regulators halted the bumper IPO of Alibaba’s fintech affiliate Ant in November. Son, whose shares in Alibaba are his largest asset, said China is becoming more concerned about antitrust and financial regulation but this is necessary for companies that will continue to grow.
Alibaba founder Jack Ma, who has been mostly out of the public eye since the IPO halt, has been drawing pictures and sending them to Son, he said. The Japanese billionaire said he has also been drawing before bed.
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.