SoftBank Vision Fund seeking cash for blank-cheque firm

(Reuters) – SoftBank Group Corp’s 9984.T Vision Fund is targeting external funding for a blank-cheque acquisition company it plans to launch, a person familiar with the matter said, in a return to marketing its investing chops after a period of retrenchment.

SoftBank may put also its own capital into the company, whose size is undetermined, the person said, declining to be identified as the information is not public.

Details of the vehicle will be revealed in the next two weeks, the person said, in line with comments reported by media from fund head Rajeev Misra at a Milken Institute conference. SoftBank declined to comment when contacted by Reuters.

The launch would see SoftBank joining the fashion for special purpose acquisition companies (SPAC) – shell vehicles that raise money in an initial public offering (IPO) before merging with a private company.

Such vehicles are being used to take a record number of companies public, bypassing the traditional IPO, with SoftBank-backed home-selling platform Opendoor last month announcing plans to list through such a merger.

“These are late-stage investments so potential returns may not be as high but the risk profile should be lower and liquidity higher as investments quickly enter the public domain,” said Kirk Boodry, analyst at Redex Research.

SoftBank is flush with cash as Chief Executive Masayoshi Son sells down core assets, leading to speculation over his future investment plans.

The group has been biding its time since efforts to raise capital for a successor to its $100 billion Vision Fund ran aground following poor performance at the fund.

The first fund invested in many of the highest profile late-stage startups using its overwhelming firepower to push for faster growth and shaking up the venture capital industry.

SoftBank has been investing on a smaller scale with its own money via a second fund amid a lack of larger targets and as the funding environment is dampened by the COVID-19 pandemic.

The group has used its mounting cash reserves to take positions in listed U.S. tech firms and has a growing number of portfolio companies going public after the IPO window reopened.

There has been an unprecedented run of 144 SPAC IPOs year-to-date raising more than $50 billion globally, showed data from Refinitiv, compared to 94 such listings last year raising $14 billion.

The frenzy for SPAC mergers, which allow private companies to sidestep IPO disclosure rules, is drawing in retail investors even as the average SPAC underperforms indexes.

SoftBank’s shares rose as much as 1.6% in Tokyo trading to touch two-decade highs before falling 1%. Buoyed by buybacks, its shares are up more than 160% since March lows.