SoftBank posts record €26bn Vision Fund loss

Rising interest rates and Chinese tech sector crackdown damage funds’ biggest holdings

SoftBank’s two Vision Funds posted a historic investment loss of €26 billion for the full year. Photograph: Charly Triballeau/AFP via Getty Images

SoftBank’s two Vision Funds posted a historic investment loss of €26 billion for the full year. Photograph: Charly Triballeau/AFP via Getty Images

 

SoftBank’s two Vision Funds posted a historic investment loss of 3.5 trillion yen (€26 billion) for the full year as its biggest holdings were pummelled by rising interest rates and Beijing’s crackdown on the tech sector.

The loss was in stark contrast to a year earlier when SoftBank posted record annual profit, surpassing global heavyweights such as Warren Buffett’s Berkshire Hathaway, after the listing of South Korean e-commerce firm Coupang.

Coupang is trading 70 per cent below its listing price and is one of a swathe of portfolio companies, including ridehailers Didi Global and Grab Holdings, that tumbled during the January-March quarter.

The slump is casting a shadow on founder and chief executive Masayoshi Son’s strategy of heavy concentration in high-growth stocks increasingly out of favour with investors as interest rates rise.

SoftBank reported an annual net loss of 1.7 trillion yen (€12.5 billion).

The 64-year-old billionaire has described SoftBank as a goose laying golden eggs but the pace of listings has slowed with one notable recent exception, Indonesia’s GoTo, sliding since going public last month.

SoftBank also recorded, in its non-consolidated earnings, a 669.5 billion yen loss due to its SB Northstar trading arm, which had placed bets on listed stocks and derivatives.

To raise cash SoftBank is targeting a US listing of chip designer Arm following the collapse of the sale to chipmaker Nvidia. – Reuters/ The Financial Times Limited 2022