Volatility in tech stocks, the Khashoggi scandal and frictions over governance have changed the mood around the Vision Fund
one of the most lucrative investment pitches in history. In September 2016 Masayoshi Son, boss of SoftBank, a Japanese internet and telecoms firm, painted a picture for Muhammad bin Salman, then Saudi Arabia’s deputy crown prince, of how his country might be transformed by technology. The prince was wooed. “45 minutes. 45 billion dollars. So $1bn per minute,” exulted Mr Son.
The fundraising will follow a difficult five months for Vision Fund 1. By the end of February its assets had increased in value by 25-30%, producing returns for all its limited partners: Saudi Arabia’s Public Investment Fund , the country’s sovereign-wealth fund, which is contributing the $45bn; SoftBank, which put in $28bn; Mubadala, an arm of Abu Dhabi’s government, which added a further $15bn; and a handful of firms, including Apple and Japan’s Sharp, which invested $1bn each.
In the kingdom, fallout from the Khashoggi murder appears to have emboldened bureaucratic resistance to the crown prince. Thes professional investing staff had always looked askance at his pledge of $45bn, which bypassed their processes for allocating money.and Mubadala reportedly used their clout to deprive WeWork of billions of dollars it was about to receive from the Vision Fund and SoftBank.
The stockmarket, for its part, values SoftBank itself at a steep discount to the sum of its listed constituents , despite a $5.5bn share buy-back in February. Worries that Mr Son is paying over the odds are thought to be a big factor. Take WeWork: when Mr Son slashed his investment to $2bn, SoftBank’s shares leapt by 6%.
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