 "People walk behind the logo of SoftBank Corp in Tokyo")
India-born Rajeev Misra will head the SoftBank Vision Fund that the Japanese investment company has set up with Saudi Arabia's Public Investment Fund.
Misra (54), a veteran banker, is the head of strategic finance at SoftBank Group. He joined SoftBank in October 2014, around the same time when Nikesh Arora joined the Japanese investor as a potential successor to its founder Masayoshi Son. Arora quit SoftBank in July this year after Son declared that he was still young to run the company. Misra was the global head, credit and emerging markets, Deutsche Bank.
Masayoshi Son’s tech-and-telecom conglomerate and the Kingdom’s top sovereign wealth fund are preparing an investment vehicle that could total $100 billion to pump fresh air into the technology bubble. That incredible sum could finance some huge leveraged buyouts, or inflate start-up valuations anew just as traditional venture capital investors are starting to fatigue. Even if Son casts his net wide, it will be hard to stay disciplined. The “Vision Fund” could see Saudi's Public Investment Fund chipping in $45 billion over five years, while SoftBank will contribute $25 billion, with other big investors making up the remainder. The result is unprecedented. To compare, global VC funds raised $53 billion in 2015, according to Preqin. And Blackstone Group is the world’s only private equity manager to have raised over $100 billion in the last decade.
It’s not clear whether the fund will make venture-capital style minority bets on younger companies, or bid for control of bigger groups, like a buyout firm. Nor is it clear if the $100 billion target is all equity — if so, the addition of debt could potentially enable hundreds of billions of dollars of LBO-type deals.
The fund’s remit is vague. Citi analysts say it will invest in artificial intelligence and the internet of things. But Son’s interests are wide-ranging, so “tech” could also include other fields such as green energy. Last year, SoftBank teamed up with Bharti Enterprise and Foxconn to launch $20 billion worth of solar energy projects in India.
If the focus is on start-ups, the timing is strange. Private valuations are already frothy and investors have grown more cautious. Venture capital funding in the three months to September slumped 39 per cent year on year to $24 billion, according to data from KPMG and CB Insights. Public markets are also trading on rich valuations, so big take-privates will also be expensive.
Perhaps Son, who recently said he wanted more time to pursue “crazy ideas”, will find some good leftfield ideas. But it is hard to be disciplined with $100 billion burning a hole in your pocket. A board member of the University of Pennsylvania and MIT’s Sloan School of Management, Misra has a BS in mechanical engineering and MS in computer science from the University of Pennsylvania and an MBA from the Sloan School, a profile on the company website says.
Misra, who backs the Conservative party in the UK, has a non-profit outfit in India, Vahani, that helps fund under privileged youth to get higher education in global universities. Misra, who was hired from Fortress Investment Group, in London, will get to take the mantle of the fund, which will potentially have $100 billion to invest in technology companies globally.
