Frankly Speaking: SoftBank Vision Fund accelerating hi-tech investment, globally and in Saudi Arabia, says CEO

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Updated 13 June 2021

Frankly Speaking: SoftBank Vision Fund accelerating hi-tech investment, globally and in Saudi Arabia, says CEO

  • Rajeev Misra made the remarks on Frankly Speaking, a series of video conversations with leading decision-makers
  • Speaking of Saudi Arabia, he said “It’s a 30 million population, it’s young, it’s growing. You have dynamic leadership”

DUBAI: More multibillion-dollar Vision Funds that will invest in high-technology startups around the world, including in Saudi Arabia, are being planned over the coming years.

Rajeev Misra, the chief executive of the business that currently oversees $130 billion of high-tech global investment, told Arab News that further funds are planned once the cash from Vision Fund 2 is fully invested. “There will be many Vision Funds over the next many decades,” he said.

Interviewed on Frankly Speaking, the series of video conversations with global decision-makers, Misra also revealed plans for the fund’s first investment in a Saudi company, its strategy to bring jobs and company start-ups to the Kingdom, and his desire to entice big Middle East investors back into the funds.

“We exist because of them. The Vision Fund is a joint effort by our two major partners — the Kingdom of Saudi Arabia and Mubadala of the UAE — and whenever they decide to join in the next one, we’ll be ecstatic,” he said.

Saudi Arabia’s Public Investment Fund was the biggest backer of the first Vision Fund, with a stake of $45 billion out of a total of roughly $100 billion, but both it and Mubadala declined to join Vision Fund 2, which launched with a $30 billion investment wallet backed by SoftBank of Japan.

Rajeev Misra

Once Vision Fund 2 is fully invested — roughly $20 billion has so far been spent — Misra and his team will look to other funds. “There will be Vision Fund 3, there will be Vision Fund 4. The important thing is to create an infrastructure of 450 employees in 11 offices who can continue the work for the next 10 or 12 or 20 years,” he said.

Misra’s confidence has been boosted by the big contribution he made to the profits of SoftBank of Japan recently. Legendary investor Masayoshi Son, founder and chief executive of the financial giant, reported the biggest ever profit by a Japanese company, $46 billion, with the bulk of that coming from Vision Fund gains.

Misra acknowledged that Vision Fund has benefited from the strong financial markets of the pandemic crisis, when governments intervened with big stimulus packages and technology stocks boomed because of new working and travel patterns.


“COVID-19 last year validated our vision and accelerated it dramatically. It would have happened anyway; it just accelerated (things) by a few years. The pandemic catalyzed the adoption of digital services. The markets helped. The buoyancy of the markets is important, but the companies have to do well. A bad investment even in a good market does not make you money,” Misra said.

The Vision Funds enjoyed a string of successful initial public offerings (IPOs), notably the multibillion-dollar profit it made on the public offering of South Korean e-commerce group Coupang in New York.

“We had several IPOs that had huge profits in the past five months. Coupang is an exciting outcome and it is an amazing story because we stuck with Coupang even when they were not doing well,” Misra said.

The investments by the PIF and Mubadala in 2018 were motivated partly by the desire for financial returns in the fast-growing technology sector, but also by the need to create jobs and attract corporate start-ups in the Middle East from Vision Fund portfolio companies.

Misra told Arab News that he was “on the cusp” of the fund’s first investment in a Saudi company — a messaging company — but he declined to give details until the company itself made the announcement. A deal could be announced in the course of the next week, he added.

“I believe we have created thousands of jobs from our portfolio companies in the region, whether it’s in construction, whether it’s in hospitality or technology. And we work very closely not just with the PIF but also with the Ministry of Investment in doing so. We are a four-year-old fund, so this will continue over the next many years,” he said.


Misra is a trustee of the King Abdullah University of Science and Technology (KAUST). “It is one of the top science universities in the world. There’s amazing talent in Saudi Arabia,” he said.

“There are limitless opportunities to invest across all sectors. It’s a 30 million population, it’s young, it’s growing. You have dynamic leadership. Riyadh has ambitious plans to become the business hub of the region.

“The recent announcement to attract the regional headquarters involved huge incentives that support relocation. I mean Riyadh was recently recognized in the top 15 most entrepreneurial cities. Globally I think it’s attracting tremendous foreign investments, including as I said from the Vision Fund, with our first investment in a local company.”

Misra was adamant that the fund’s basic strategy — of investing in early stage high-technology companies — was the right one, and dismissed any suggestion of a crash in the valuations of the technology sector.

“The technology revolution is just accelerating. Not just with your regular industries like e-commerce or food delivery, but it’s accelerating within life sciences. In major industries, what are the two biggest industries that impact our GDP? Healthcare and education,” he said.

“Over the next five years, hundreds of billions of dollars in value will be created in customized health care, in reducing the cost of health care, and in personalized medicine.

“Also in democratizing online education, where education is accessible and will fuel quality education online. You will have online high schools and colleges providing Ivy League education globally. We believe AI will transform every industry in the world.”

“Technology is going nowhere. Technology is like what the human DNA is to your daily existence — it is intertwined with you. Either you adopt it or the business goes bust.”

The Vision Fund suffered some high-profile governance issues in the past, notably the demise of the IPO of WeWork in 2019 and subsequent revelations about conflicts of interest involving the founders of the office-space company. Some critics said that they detected a “Wild West culture” at Vision Fund portfolio companies.

Misra disagreed with that label. “In Fund 1 we have 85 portfolio companies. In Fund 2 we have 70 or 80 companies. We take minority stakes in those companies. We don’t run those companies. We sit on the boards. We do keep an eye on them but we don’t day-to-day run those companies.

“But we did make some mistakes and we learnt from it. Since then, we have undergone a major turnaround and now we make sure there are no conflicts of interest with the founder.”

Frank Kane

On the current craze for special purpose acquisition companies (SPACs), which some have called “blank check” companies, he said that there were benefits from accelerating the progress toward a stock market listing, but pointed out that no Vision Fund portfolio companies had used the fund’s own SPAC to go public.

“The most important message here is for a company, once you go public, you have to be ready and you have to be prepared to go public. You have to understand that you have to get up every quarter and explain to the analysts and the shareholders how you have performed,” he said.

Misra was keen to pay tribute to Son, the SoftBank founder who is often described as a “visionary” in the world of high-tech investment. He recalled how Son invested billions in a small mobile phone operator in Japan in 2006, just before the smartphone was launched.

“He said, ‘Rajeev, you don’t understand. Computing is going to move to the hand from the desktop. People are not going to be working off their desktop anymore. They’re going to use phones to compute, and I see that over the next 10 years and I’m willing to take that bet.’

“This shows you the nature of his vision — he saw 10 years forward and was willing to take a $20 billion investment in a highly competitive market when the market cap of SoftBank was $9 billion.”

Misra added: “That was 15 years ago, and it all came true.”


Twitter: @frankanedubai


Sterling set for worst week since Sept. 2020

Updated 19 June 2021

Sterling set for worst week since Sept. 2020

LONDON: Sterling extended its fall against the US dollar on Friday, dropping below $1.39, hurt by the US Federal Reserve’s hawkish surprise and an unexpected fall in Britain’s retail sales.
The pound dropped against a strengthening dollar on Thursday after the Fed surprised markets by signaling it would raise interest rates and end emergency bond-buying sooner than expected.
On Friday, it fell further against both the dollar and the euro. It was down 0.3 percent on the day at $1.389, having touched as low as $1.38555 — its weakest since May 4. It was on track for its worst week since September 2020.
Versus the euro, it was down around 0.3 percent at 85.78 pence per euro, on track for a small weekly fall.
“GBPUSD remains bogged down below the 1.39 handle by a confluence of broad USD strength and a slight deterioration in near-term data,” said Simon Harvey, senior FX market analyst at Monex Europe.
“The limited impact of the data on sterling is largely because retail sales volumes remain above pre-pandemic levels and a shift in consumption patterns toward services after the May 17th reopening was always likely.”
For cable, market participants are weighing up the Bank of England and the Fed’s relative pace of possible monetary policy tightening. The BoE next meets on June 24.
BofA strategists said in a note to clients that it changed its view on the central bank’s tightening trajectory.
and now expects a 15 basis point rate hike in May 2022, compared to previously expecting no hikes in 2022.
“Brussels’ patience with London’s having its cake and eating it is wearing thin. Indeed, there is a risk of protocols being triggered and tariffs being threatened more seriously,” wrote ING strategists in a note to clients.
“The next few weeks could thus be a vulnerable period for Cable, where a break of 1.3890 opens up 1.3800/3810 — the last stop before an extension to the March/April lows of 1.3675.”

Bahrain’s Batelco could be first stock to be dual listed on Tadawul

Updated 18 June 2021

Bahrain’s Batelco could be first stock to be dual listed on Tadawul

  • Samba has been hired as an adviser on the deal

RIYADH: Bahrain Telecommunications Co. (Batelco) is planning to become the first company to have a dual listing of shares on Saudi Arabia’s stock exchange (Tadawul), Bloomberg reported citing people familiar with the matter.

The investment arm of Samba Financial Group has been hired as an adviser on the deal, the people said, asking not to be identified for information privacy.

No decision has been made and the company may decide against the dual listing, they said.

A spokesperson at Batelco declined to comment, while Samba Capital didn’t respond to messages seeking comment, Bloomberg said.

Tadawul has been trying to encourage Middle Eastern firms to dual list for years, without success. Aluminium Bahrain had considered a dual listing in 2014, but it never occurred.

Saudi Arabia’s National Debt Management Center wins global awards for second year

Updated 18 June 2021

Saudi Arabia’s National Debt Management Center wins global awards for second year

  • Saudi office won Middle East and emerging market awards

RIYADH: Saudi Arabia won the Best Sovereign Public Debt Office in the Middle East and the Most Impressive Emerging Market Issuer Award at the 2021 Global Capital Bond Awards, for the year 2021, for the second year in a row, SPA reported.

The Global Capital Bond Awards honors the achievements of governments and companies of all sizes in the field of sovereign and regional finance, banking services, hedge funds, and many other areas within the financial services sector.

It also highlights the most prominent innovations and achievements within the financial services sector, globally.

Saudi Arabia sold SR8.27 billion ($2.20 billion) of riyal-denominated sukuk in June, up from $941 million in May, bunt down from $3.1 billion April, National Debt Management Center data show.

“Driving growth of the Kingdom’s capital markets will be an increase in bond issuance to help fund the SR12 trillion Vision 2030," said Khalid Al-Bihlal, head of S&P Global Ratings KSA. "We project a gradual rise in the use of Saudi Arabian riyal-denominated bond issuance as the local capital markets develop. The US dollar is currently the currency of choice for such bonds."

Saudi MoF electronically linked to SAMA

Updated 18 June 2021

Saudi MoF electronically linked to SAMA

RIYADH: The Saudi Central Bank (SAMA) announced the completion of an electronic link with the Ministry of Finance to process requests relating to the bank accounts of government agencies held at Saudi commercial banks through the online portal Hesaab.

SAMA is seeking to improve and accelerate the procedures related to requests of government agencies’ bank accounts received from the Ministry of Finance, by implementing technical solutions with minimal human intervention, it said in a statement on Thursday.

The Hesaab portal is one of the National Transformation Program 2020 initiatives that improves the level of financial services, in line with Vision 2030.

Oil falls amid dollar strength; demand picture still bullish

Updated 18 June 2021

Oil falls amid dollar strength; demand picture still bullish

  • Prices remain close to multi-year highs
  • Dollar jumped since Fed moved rate-hike forecast forward

LONDON: Oil prices fell for a second straight session on Friday as the US dollar soared on the prospect of interest rate hikes in the United States, but they were on track to finish the week little changed and only slightly off multi-year highs.
Brent crude futures were down 64 cents, or 0.9 percent, at $72.44 a barrel as of 9:00 a.m. GMT, extending a 1.8 percent decline on Thursday. The contract is set to be largely steady for the week.
US West Texas Intermediate (WTI) crude futures were down 53 cents, or 0.8 percent, at $70.51 a barrel, after retreating 1.5 percent on Thursday and is also set to be flat on the week.
On Wednesday, Brent settled at its highest price since April 2019 while WTI settled at its highest since October 2018.
“Oil markets retreated sharply overnight as a stronger US dollar and falling commodity prices elsewhere saw the overbought technical correction continue,” said Jeffrey Halley, senior market analyst at OANDA.
The dollar has rocketed in the two sessions since the US Federal Reserve projected possible rate hikes in 2023, earlier than market watchers previously expected. A rising dollar makes oil more expensive in other currencies, curbing demand.
The prospect of rate hikes also weighed on the longer-term growth outlook, which would eventually hurt oil demand, in contrast to the near-term outlook for growth in demand as COVID-19 related curbs on movement and business activity ease and road and air travel pick up, said Westpac senior economist Justin Smirk.
“The near term’s all very positive. The question is how much further can it rise, how much scope is there if you’re looking at an environment where interest rates are going to rise,” Smirk said.
Oil prices also fell after Britain on Thursday reported its biggest daily rise in new cases of COVID-19 since Feb. 19, with government figures showing 11,007 new infections versus 9,055 a day earlier.
Adding to negative sentiment were remarks from Iran’s top negotiator on Thursday saying talks between Tehran and Washington on reviving the 2015 Iran nuclear deal have come closer than ever to an agreement.