SoftBank's first US$97 billion "Vision Fund" was the biggest private pool of money ever raised and turned Masayoshi Son into the most important tech investor in the world.
On Friday, Mr Son finally revealed plans for a second Vision Fund, three years after he announced the first, that could be even bigger at US$108b.
But the launch of Vision Fund II was more notable for what information was missing, rather than for the list of high-profile names, such as Apple and Microsoft, that were attached to the project.
Ever the showman, Mr Son once again focused attention on a big number and on the lofty ambition to accelerate "the AI revolution through investment in market-leading, tech-enabled growth companies".
But there was only one clear commitment: a pledge from SoftBank to invest $38bn of its own money. The numerous other companies that will apparently provide the remaining $70bn have only signed a non-binding memorandum of understanding.
Some of the names raised eyebrows. The National Investment Corporation of the National Bank of Kazakhstan, for example, only had assets of US$107m in 2018.
• Lex premium commentary: SoftBank/Vision Fund II: billionaire boys' club
Another glaring absence was any mention of the governments of Saudi Arabia and Abu Dhabi which between them contributed 60 per cent of the first Vision Fund.
SoftBank said that discussions with both of them were still under way but their omission was jarring, especially since the Saudi crown prince, Mohammed bin Salman, pledged just months ago to put $45bn in a second fund, even though there has been tension among the Middle Eastern investors over SoftBank's backing for WeWork, which they consider to be a property, rather than a tech, investment.
While the structure and management of the new fund is likely to mirror the first Vision Fund, there appears to be a further tilt towards participants holding preferred debt, rather than equity. In the first fund, SoftBank was the only pure equity investor, giving it greater upside but also greater downside, while most other participants had a split of debt and equity.
In the new fund, some investors have already signalled their preference just to hold debt. "We've only signed an MoU — it's not legally binding, so it might be a little on the premature side, but we do want to make absolutely clear this is not an equity investment," said one of the named participants. "We make a return and are guaranteed our money back."
One major coup was the involvement of Microsoft, which SoftBank approached for a $5bn contribution, according to one person close to the process, but whose commitment is likely to be lower, according to one person close to the tech company.
Some of those named on Friday suggested that they were attracted by the idea of building relationships with SoftBank and with its portfolio of start-ups, which include Uber, WeWork, and hotel chain Oyo. Microsoft, for example, is keen for more early-stage technology companies to adopt its cloud computing service Azure.
The urge to build relationships also helps to explain the line-up of Japanese financial institutions behind the second Vision Fund, with Japan's top three banks — MUFG, Mizuho and Sumitomo Mitsui Banking Corp — being joined by two of the country's biggest brokers including Daiwa and the second-largest life insurance group. Looking at the list, one analyst at a Japanese brokerage said: "This is literally all of Japan backing the Vision Fund II."
The line-up shows how SoftBank has emerged as one of the most important fee payers, with banks fighting for its work, led by Mizuho and Goldman Sachs. The SoftBank ecosystem is now dominated by bankers, after the former Deutsche Bank executive Rajeev Misra, who runs the Vision Fund, hired many of his old colleagues to help with operations and investment strategy.
SoftBank is working with a trio of outsider fundraisers, including Anshu Jain, the former chief executive of Deutsche Bank who is now at US brokerage Cantor Fitzgerald, Goldman Sachs and London-based Centricus to sell the new fund.
Also missing from the announcement were explanations for how SoftBank will raise its share of the new fund, and any detailed sense of its strategy.
Analysts said SoftBank was likely to sell more shares in Chinese e-commerce group Alibaba and US carrier Sprint to raise cash. It can also monetise its Vision Fund assets as was the case with recent listings of Uber and Slack.
"The key point is how quickly SoftBank's capital will be deployed," said Motoki Yanase, Moody's vice-president and senior credit officer. "The longer it takes [to spend the new fund], it will be able to cover with profits from its other holdings."
Tech investors, meanwhile, wondered how SoftBank would find enough targets to absorb a huge new wave of cash.
One senior private investment professional, who asked not to be named, said: "They're starting to run out of runway. The scale they're trying to invest in, billions of dollars per unicorn (a start-up valued at $1bn) — there's not many of those deals globally. They've already had big exposure to a handful of them, and so a lot of it is just going to have to continue to fund their own deals."
Written by: Kana Inagaki and Arash Massoudi
© Financial Times