SoftBank’s Vision Fund is looking to devise a low-risk investment strategy after losing in excess of $5 billion in WeWork, The Wall Street Journal reported on Friday (Oct. 25).
Current and former executives at the fund told WSJ that its investment strategy will look toward portfolio companies.
Head of the Vision Fund Masayoshi Son, SoftBank’s chairman and CEO, reportedly told employees to aim to make money with firms in which they are already invested, sources said.
Vision Fund executives are now looking closely at potential partnership deals and are treading carefully. One such investment being cautiously examined is the funding of a Silicon Valley startup called Creator that designs robots that can cook hamburgers, sources said.
The strategy pivot is a big change for Son, who has been known to execute deals quickly, the source told WSJ. There could also be layoffs at the fund, with “weaker employees” being asked to leave. About 12 staffers have already exited on their own.
On the flip side, a Vision Fund spokesperson told the WSJ the fund is always looking for new hires: “We’re always looking to innovate and improve as we grow.”
People familiar with the fund told WSJ that there is poor communication to staffers from Son and they are troubled that he “makes all investment decisions.”
The strategy shift comes on the heels of SoftBank’s announcement of the $108 billion Vision Fund 2, as reception by investors has been weak. So far, the only money invested in the fund is $38 billion that came from SoftBank itself.
The WeWork debacle has weakened the perception of Son’s investment chops, and a Vision Fund writedown is anticipated. Both SoftBank and the Vision Fund dumped over $10 billion into WeWork, some at a $47 billion valuation. When WeWork bailed on its IPO, valuation was only $10-12 billion.
Son is participating in an annual three-day investment forum in Saudi Arabia at the Ritz-Carlton in Riyadh from Oct. 29-31, where he hopes to generate investment interest in the new fund.
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More