SoftBank Vision Fund 52 Trillion KRW Worst Loss... "No New Investments Expected"

Japan's SoftBank Group's Vision Fund recorded a historic annual net loss of 53 trillion won. The Vision Fund announced that it will not make new investments for the time being, citing concerns over the shockwaves of geopolitical risks such as the Ukraine war and the US-China conflict.

[Image source=Reuters Yonhap News]

On the 11th (local time), SoftBank Group disclosed in its earnings report that the Vision Fund, a technology investment fund, posted a net loss of 5.3223 trillion yen (approximately 52.45 trillion won) for the fiscal year 2022 (April last year to March this year). This figure is significantly higher than last year's loss of 362.6 billion yen and marks the largest loss since the Vision Fund was established.

However, in the first quarter of this year (company's fiscal fourth quarter of last year), the fund recorded a net loss of 970.1 billion yen. Compared to the same period last year (1.708 trillion yen), the loss margin has significantly decreased. Amid the severe tightening measures continuing since last year, which dealt a direct blow to the Vision Fund investing in technology companies, the stock prices of some tech companies rebounded sharply in the first quarter of this year, reducing the loss margin.

The company stated that geopolitical tensions are contributing to uncertainty in performance. Yoshimitsu Goto, Chief Financial Officer (CFO), said, "We are deeply concerned about geopolitical risks," adding, "It is difficult to resume investments for the time being." The amount invested by Vision Fund 1 and 2 in the first quarter of this year was only 400 million dollars (approximately 530 billion won).

Kirk Buddree, an analyst at investment advisory firm Astris Advisory Japan, said, "With central banks around the world still maintaining a tightening stance to control inflation, it does not seem easy for SoftBank to resume its investment offensive."

The fund is also reducing its existing investment stakes. The Vision Fund sold Alibaba shares worth 7.2 billion dollars (approximately 9.53 trillion won) this year, reducing its holding ratio to 3.8%. To secure liquidity, it also pursued the New York Stock Exchange listing of its subsidiary, the UK semiconductor design (fabless) company ARM. Earlier, ARM CEO Rene Haas stated last month, "We have decided that pursuing a listing only in the US this year is the best path for the company and its shareholders," officially announcing plans for a US-only listing. The US-only listing is known to strongly reflect the intentions of SoftBank Group Chairman Masayoshi Son. Chairman Son is believed to consider that the company’s value will be evaluated higher on the US stock market than on the UK stock market.

This content was produced with the assistance of AI translation services.