SoftBank secures the first capital commitment to a $100 billion fund with Saudi Arabia and Abu Dhabi.
An investment group that includes Japan’s SoftBank and Saudi Arabia’s sovereign wealth arm announced on Saturday it had closed $93 billion in capital, committed to what is expected to be the largest technology investment fund ever.
They include Apple, Qualcomm, UAE-based Mubadala Investment Company, Saudi Arabia’s PID public fund, Foxconn, and Foxconn-owned Sharp. The plan is for the fund to reach its $100 billion target within the next six months through commitments from other investors. The fund is committing to a minimum of $100 million deal checks, with a focus on both minority and majority deals with companies that are either private or public.
Softbank is investing $28 billion in the fund, more than $8 billion of which will come from an in-kind contribution from its stake in microprocessor company ARM Holdings. The amount of financial commitment from the Saudi fund was not disclosed, but the Vision Fund also will be a vehicle for oil-rich Saudi Arabia to diversify its investments.
Son, whose company is the world’s single biggest tech investor, said, “Technology has the potential to address the biggest challenges and risks facing humanity today. The businesses working to solve these problems will require patient long-term capital and visionary strategic investment partners with the resources to nurture their success.”
Son has made tens of billions from investments in companies including Alibaba Group Holding Ltd, Yahoo and Supercell Oy, and the new fund will likely pursue a similar strategy of backing technology companies at all stages. The focus may well be the US after Son met with President Donald Trump in December and pledged to create 50,000 new jobs by investing $50 billion in startups and new companies.
Yasir Al Rumayyan, managing director of the Saudi public fund said: “We are building a portfolio that is diversified across sectors, asset classes and geographies, and expect the Vision Fund to act as a platform to access a range of exciting, emerging opportunities in the technology sector.”
He added that the investment will be a linchpin of Saudi Arabia’s efforts to “develop a diversified, knowledge-based economy.”
The deal came together after what reportedly were months of difficult negotiation between the tech company SoftBank and the Saudi fund, which is controlled by Mohammed bin Salman, the deputy crown prince of Saudi Arabia.
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