Softbank records $37 billion Vision Fund profit in Q4
TOKYO: Softbank Group Corp. on Wednesday reported a record 4.03 trillion yen ($37 billion) Vision Fund unit profit from a fourth-quarter gain on Coupang , putting it among the world’s top earning firms a year after an unprecedented loss.
Group net profit was 4.99 trillion yen ($45.88 billion) in the year ended March, beating the $42.5 billion made by Warren Buffett’s Berkshire Hathaway in its last business year.
“This is not a result to make us puffed up with pride... I don’t want it to be a one time thing,” founder and CEO Masayoshi Son told a news conference.
The profit compares with an 962 billion yen loss a year earlier after teetering tech bets depressed the value of Softbank’s portfolio. “It’s clearly validation of Masa’s thesis,” Navneet Govil, Vision Fund’s chief financial officer, told Reuters.
Market enthusiasm for tech stocks drove the public listing of Softbank-backed e-commerce firm Coupang and used-car trading platform Auto1 Group and the rising share price of ride-hailing firm Uber during the quarter.
To sustain Softbank’s position among the global corporate elite, Son will have to replicate that performance with other yet-to-list firms in the Vision fund portfolio. Son has likened that to laying golden eggs.
Candidates including ridehailing firm Didi, Tiktok owner Bytedance and truck service platform Full Truck Alliance have strong revenue growth, healthy market share and a clear path to profitability, according to Govil.
These companies are “sizeable investments with significant value to be unlocked,” he said.
Much of the Vision Fund’s gain, however, is on paper with the value of the portfolio locked up in the stock market amid concern over frothy valuations and a boom in SPACS which has drawn regulatory scrutiny.
The total fair value of the first $100 billion Vision Fund and the smaller second $10 billion fund was $154 billion at the end of March, with Softbank distributing $22.3 billion to limited partners. Softbank has hiked its committed capital in the second fund to $30 billion, reflecting the breadth of investment opportunities, Govil said.
Two of Softbank’s highest profile bets, Wework and Grab, have outlined plans to list via SPAC mergers, with Vision Fund reportedly in talks to use its own such vehicle to list portfolio company Mapbox.