Macaskill on markets: SoftBank’s Vision Fund moves into DCM and ECM
SoftBank and its roughly $100 billion Vision Fund face growing questions about their use of leverage and the size of stakes built in technology-related companies.
The failed IPO of WeWork and a fall in the value of Uber – two big holdings for Softbank's Vision Fund – is likely to complicate the closure of a second Vision Fund, which was announced by SoftBank in July with an expected capital of $108 billion.
The existing Vision Fund is nevertheless pressing ahead with plans to boost its ability to provide debt and equity capital market services to the companies in which it invests. The fund – the biggest single investment vehicle of its type – will accordingly join other investors, such as KKR, in effectively bringing some capital markets functions in-house.
This trend could threaten the future advisory fee income of banks, especially mid-tier firms, which are already suffering from an erosion of their ability to profit from providing trading services to clients.
John Pipilis, until recently the head of fixed income at Deutsche Bank, will lead a move to boost DCM services for the Vision Fund; while Mark Agne, a one-time head of securities for Japan and co-head of Asian equity trading at Goldman Sachs, will run ECM functions, Euromoney understands.