SoftBank Group Corp. is calling in the cavalry.
After announcing the SoftBank Vision Fund last year, Chairman Masayoshi Son proceeded to hire a collection of former Deutsche Bank AG executives, including Akshay Naheta, to help run the money out of an office in London's Mayfair.
Now SoftBank is paying a hefty premium for Fortress Investment Group, a publicly traded hedge-fund manager. At $3.3 billion, you could call the deal an acqui-hire when set alongside the $100 billion Son wants to raise at his Vision Fund.
To date, SoftBank's plans for this humongous pile of cash have been less vision and more fund. It's certainly not a venture fund, that much is certain.
It had been understood that through the Vision Fund, SoftBank would keep its tech focus, especially given the investors it has lined up. With SoftBank buying Fortress, we see a radical departure. The New York-based outfit, whose stock is down two-thirds since its 2007 IPO, focuses largely on real estate and credit. It has suffered from poor currency trades and investor withdrawals, and closed a flagship macro hedge fund 18 months ago.
While the Fortress purchase muddies the waters on SoftBank's focus, the Vision Fund's mixed mandate of public share investments, startup capital and private equity has it looking more like a private office -- one which happens to be owned by a public company.
It's all well and good that SoftBank is putting its own and its co-investors' money to work, what's really needed is direction and focus. Sure, the SoftBank Vision Fund is funded by SoftBank and co-investors, while the Fortress acquisition is being made by SoftBank itself, yet both operate under Masa's purview.
-- Gadfly's Nisha Gopalan contributed to this column.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
(Updates to show focus of SoftBank and Vision Fund investments from fifth paragraph. An earlier version corrected the name of Vision Fund in second paragraph.)
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