SoftBank Vision Fund Faces Investor Hesitation for Planned Sequel
Key backers of SoftBank's massive $100 billion Vision Fund reportedly plan to skip or limit their contributions to a proposed second fund. These investors now prefer to make late-stage deals directly rather than paying management fees to SoftBank.
SoftBank shakes up the venture capital world with its unprecedented $100 billion Vision Fund, but speculation around a follow-up vehicle faces major hurdles. The fund rapidly deploys its capital at a record pace in the first quarter, yet key backers reportedly show lukewarm interest in returning for a second act. The Wall Street Journal reports that major investors plan to make limited or no contributions to the proposed sequel.
Sources indicate that the Saudi Arabia's Public Investment Fund and the Canada Pension Plan Investment Board bypass SoftBank to create their own direct late-stage investment vehicles. This strategy eliminates third-party management fees and gives fund managers total control over their capital. While the Journal does not mention it, the ongoing controversy surrounding the Saudi crown prince and his links to the murder of journalist Jamal Khashoggi also looms over the fund's reputation.
The Vision Fund publicly refutes the Journal's claims as misleading and inaccurate, pointing to impressive paper gains shown by SoftBank CEO Masayoshi Son. To address concerns about a lack of transparency, Son pledges to provide an annual public update on the fund's performance, a move that potentially paves the way for a rumored IPO. Despite the backstage drama, the fund continues its rapid dealmaking and backs five major ventures in May alone, including DoorDash and GM Cruise.