Japan’s SoftBank posts $17bn fund loss on tech slump

The investment management giant had booked a record loss in May amid market turmoil driven by rising interest rates.

Japan’s SoftBank Group Corp has posted a 2.33 trillion yen ($17.25bn) loss at its Vision Fund unit for the April-June quarter amid a plunge in the value of its tech portfolio.

SoftBank had booked a record loss at the Vision Fund unit in May as market turmoil driven by rising interest rates and political instability hit the tech investor.

The group’s sliding portfolio pushed it to a 3.16 trillion yen ($23.4bn) net loss in the latest quarter. That compared with a profit of 761.5 billion yen ($563.75m) in the same period a year earlier.

SoftBank founder and CEO Masayoshi Son, who will speak at an earnings briefing at 07:30 GMT, has pledged to tighten investing criteria and preserve cash to weather the downturn.

In the quarter ended in June, falling listed investments included robotics firm AutoStore Holdings and artificial intelligence firm SenseTime Group.

SoftBank said it booked a 296 billion yen ($219.13m) loss on the value of Vision Fund’s private investments. Analysts have said writedowns of private assets are unlikely to reflect the extent of current market weakness.

Plunging initial public offering volumes and market scepticism towards money-losing startups have squeezed an important source of capital for SoftBank, which hopes to list chip designer Arm following the collapse of a sale to Nvidia.

The selloff has hit hedge fund Tiger Global, which competes with “unicorn hunter” Son on deals and saw its flagship fund fall 50 percent in the first half of the year after it underestimated the impact of surging inflation on markets.

Source link