SoftBank posts record Vision Fund profit

SoftBank posts record Vision Fund profit

SoftBank said the aim was to strengthen governance by increasing the portion of external directors.

The Vision Fund unit set a new profit record in the quarter, beating the previous high in the third quarter of fiscal 2018, before Uber's disappointing IPO and the implosion of WeWork's offering the following year. Yasir O. Al-Rumayyan, who represented Saudi Arabia's Public Investment Fund, will also leave the board.

Rajeev Misra, head of the company's Vision Fund, disputed that characterization and said its trading wasn't almost large enough to move trillion-dollar companies.

The bets, which come as SoftBank hopes to reestablish its investing chops after its struggles, were undone by a 292 billion yen derivative loss.

The Financial Times in a report on Monday said that in February, the U.S. hedge fund Elliott built a $2.5 billion stake in SoftBank and called for Masayoshi Son to improve its governance and return cash to investors. The gains put both funds solidly in the black, with Vision Fund 1 valued at $1.4 billion more than the cost of the 83 investments it was still holding at the end of the quarter.

The Japanese group on Monday reported a net profit of JPY 627 billion (USD 6 billion) for the July-September quarter, after rising valuations for its tech portfolio.

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SoftBank performed fairly upbeat in the stock market a year ago with an annual gain of more than 25%.

Those deals, which include the sale of most of its stake in T-Mobile US Inc. and a reduction of its stake in its Japanese mobile-phone unit, have turned SoftBank into a company whose main business is investments.

SoftBank recently established the asset management arm, separately from its Vision Fund vehicle, to manage excess cash.

"I'm not that hung up on the numbers", Son said of the group's earnings at a briefing on Monday, reiterating the company's view that net asset value, not earnings, are the primary measure by which SoftBank should be judged considering its shift away from running businesses to tech investing. The operation is managed by its new asset management subsidiary SB Northstar, where Son personally holds a 33% stake.

SoftBank said it had nearly $16.8 billion in tech stocks at the end of September, including more than $6 billion in Amazon and $2 billion in Facebook Inc.

The board will now have nine members with a greater proportion of external directors. Chief Operating Officer Ruwan Weerasekera retired earlier this month while partner Penny Bodle has also departed.

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