SoftBank’s Vision Fund loses £4.6bn as tech rout continues

Japanese investment giant Softbank swung into the red between October and December, driven down by heavy losses at its flagship Vision Fund.

Softbank’s Vision Fund suffered the brunt of a global tech rout that has shaved billions from the value of the world’s largest tech firms.

Vision Fund booked a loss on its investments of 730.4bn yen (£4.6bn) between October and December while losses across the firm came in at 783.42bn yen, compared with a 29.05bn yen profit a year earlier.

The investor said its Vision Fund unit, which built a name for splashy bets on high growth tech firms, reined in its investments as high-growth tech firms were buffeted by soaring inflation and the shocks of war in Ukraine.

Softbank has been forced onto a defensive footing in the past 12 months and said it was continuing to shed some of its stakes as part of “prudential defensive financial management”. 

The loss across the firm marks a swing back into the red after it posted profits in the July to September quarter following the sale of some of its stake in China’s Alibaba group.

Losses in Vision Fund have been dragged down by the sharp falls in its sprawling portfolio of unlisted firms. The unit had investments in 348 companies as of end-December, of which 305 are private firms.

Softbank’s billionaire chief Masayoshi Son said in May last year that the firm would be curtailing its investments and slashing headcount in the Vision Fund unit as part of a rigorous group-wide cost cutting exercise.

He admitted in a press conference he had got carried away in some of the splashy bets the firm had made, saying he was “ashamed” for being so elated by “big profits in the past”. 

Son has shifted his focus onto the listing of Cambridge-based chimpaking giant Arm which is now seen as key to buoying the group’s bottom line. A float had initially been planned for late last year but rocky market conditions have caused the plans to be shelved.

UK policymakers and lawmakers have been on a charm offensive in the last year in a bid to win the UK a role in the initial public offering but Son has said publicly that New York’s Nasdaq exchange remains the most likely home for the firm.

Additional reporting by Kiyoshi Takenaka, Reuters