Connect with us

How $100 Billion from the SoftBank Saudi Fund Will be Transformative

Published

on

Startups and growth-focused technology companies need to pay close attention to the amount of capital sitting in sovereign wealth.

selfie22

Let the unicorns breathe. Unicorns are startups that have valuations of over US$ 1 billion. Tokyo-based SoftBank Group Corporation, overseen by Masayoshi Son, and Saudi Arabia’s Public Investment Fund (PIF) announced the formation of a US$ 100 billion technology-focused fund with a working moniker – SoftBank Vision Fund. The fund, to be based in London, could have less assets than US$ 100 billion dependent on how much it could raise. However, if destiny were to come true, the techie fund would be a multitude times larger than singular private equity funds managed by The Blackstone Group or The Carlyle Group. With regard to funding, SoftBank is kicking in US$ 25 billion over a period of time, while the re-oriented PIF plans to allocate US$ 45 billion over a 5-year span. The fund investment is in line with Saudi Arabia’s Vision 2030 strategy, in which to help diversify the country away from oil, according to Saudi Deputy Crown Prince Mohammed Bin Salman, Chairman of PIF, in a press release. The rest of the fund capital plans to be raised from long-term patient capital such as sovereign funds, pensions and other like-minded investors. Other public institutional investors have had their interest piqued in the technology fund. Abu Dhabi-based Mubadala Development Co. is in discussions with SoftBank on potentially committing a few billion dollars to the fund. Another sovereign investor, the Qatar Investment Authority (QIA), has also expressed a level of interest.

Increased Competition for High-Quality Growth Equity Investments

Startups with strong stories to tell and prospects for growth may fight for higher valuations, as more capital enters from the sidelines. In contrast, to mature startups that have failed to materialize and grow revenue. This formidable undertaking of the vision fund could transformationally impact how venture capital raises money. Historically, startups relied on angel investors and venture capital funds. The capital base has shifted as more large asset owners prefer to go direct, bypassing these fee-generating vehicles. Venture capital firms with less known reputation could be crowded out of investment opportunities, forced to take on higher-risk earlier stage startups, or face overpaying for sections of private companies. The fund could possibly create friction in the private equity growth community by competing for technology buyouts from firms like Thoma Bravo, MSD Capital, Francisco Partners and Vista Equity Partners.

Funding Large-Scale Innovation

More patient capital is steadily flowing into the venture and growth equity ecosystem, according to data from SWFI. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

BlackRock Contemplates Stake in Eurizon

Published

on

Asset management giant BlackRock is contemplating purchasing a 30% ownership stake in Intesa SanPaolo’s asset management unit called Eurizon Capital SGR S.p.A. BlackRock is keen on growing its technology business and increase market adoption of its Aladdin platform.

Intesa has been working with UBS to seek out strategic options for Eurizon. Intesa is keen on maintaining control over Eurizon.

Continue Reading

SWFI First Read, June 22, 2018

Published

on

JPMorgan Fund Buys 40% of Oxford Properties’ French Portfolio

A fund advised by JP Morgan Asset Management committed €400 million in Oxford Properties’ French portfolio. Essentially, Oxford Properties sold a 49.9% non-managing interest in 32 Rue Blanche, 92 Avenue de France and Paris Bastille. Oxford Properties made its maiden investment in Paris in 2014 when it acquired 32 Rue Blanche.

Oxford Properties is the real estate unit of OMERS.

Temasek Explores Further Cash Commitments to FirstCry

[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Continue Reading

DOL Fiduciary Role is Struck Down by Fifth Circuit Court of Appeals

Published

on

The U.S. Court of Appeal, Fifth Circuit, confirmed a March 15th decision to strike down the U.S. Department of Labor’s (DOL) fiduciary rule. The fiduciary rule is a series of seven different rules that broadly interpret the term “investment advice fiduciary” and redefine exemptions to provisions concerning fiduciaries that appear in the Employee Retirement Income Security Act of 1974 (ERISA). The 5th U.S. Circuit Court of Appeals overturned a decision by a Dallas federal court that had upheld the DOL fiduciary rule.

[ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]

Continue Reading

Popular

© 2008-2018 Sovereign Wealth Fund Institute. All Rights Reserved. Sovereign Wealth Fund Institute ® and SWFI® are registered trademarks of the Sovereign Wealth Fund Institute. Other third-party content, logos and trademarks are owned by their perspective entities and used for informational purposes only. No affiliation or endorsement, express or implied, is provided by their use. All material subject to strictly enforced copyright laws. Registration on or use of this site constitutes acceptance of our terms of use agreement which includes our privacy policy. Sovereign Wealth Fund Institute (SWFI) is a global organization designed to study sovereign wealth funds, pensions, endowments, superannuation funds, family offices, central banks and other long-term institutional investors in the areas of investing, asset allocation, risk, governance, economics, policy, trade and other relevant issues. SWFI facilitates sovereign fund, pension, endowment, superannuation fund and central bank events around the world. SWFI is a minority-owned organization.