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SoftBank’s LatAm and Vision Funds Lost $5.8bn in Q4 2022
SoftBank's Latin America and Vision Funds lost $5.8bn in the quarter that ended Dec. 31 2022.
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According to the latest financial report, SoftBank’s Vision Funds sustained a loss of more than $5.8 billion in the December quarter. The results represent a fourth straight quarterly loss for SoftBank’s investment unit.
Vision Funds Post a Fourth Straight Quarterly Loss
Softbank Group said its Vision Fund unit lost almost $6 billion over the quarter ending December 2022, marking the fourth consecutive quarterly loss for the conglomerate’s investment arm. Shares of SoftBank were down 1% in Japan before the results were announced.
According to the company’s financial results, SoftBank’s Vision Fund 1, Vision Fund 2, and Latin American funds have sustained a collective loss of $5.8 billion in the quarter that ended Dec. 31. This is down from a $10 billion loss the funds saw in the previous quarter.
The new report marks another major swing in SoftBank’s quarterly earnings. Following its record loss of more than $24 billion in Q2 2022, the Japanese investment giant reported a net income of $21.7 billion in Q2 2022. However, the Vision Fund lost $7.2 billion in that quarter amid a significant slump in the portfolio’s value.
In the wake of the latest loss, SoftBank’s billionaire founder and CEO, Masayoshi Son, is not expected to deliver a presentation on Tuesday following his announcement in 2022 that he would focus on listing the UK chipmaker Arm, one of the conglomerate’s prize assets. SoftBank plans to list Arm by March 2024, according to the group’s CFO Yoshimitsu Goto.
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SoftBank to Stay Defensive amid Uncertainty
SoftBank has adopted a more defensive stance in recent quarters after high-interest rates around the world and China’s tech clampdown triggered a major stock decline. This slump has battered SoftBank’s portfolio valuation, forcing the conglomerate to focus on retaining cash.
At the end of December, the conglomerate said the fair value of its $100bn Vision Fund I fell 4.4% from a year ago due to multiple markdowns in private companies. The portfolio value of its Vision Fund II, which wrote down its $100m investment in the collapsed FTX, fell 6.2%.
Navneet Govil, the executive managing partner at SoftBank Global Advisers, said the group’s position “remains defensive and is focused on building resilience” amid “significant unpredictability in the labor markets, future monetary policy road maps, as well as corporate earnings.”
Do you think SoftBank’s Vision Funds could recover to its previous highs in 2023? Let us know in the comments below.
Tim Fries
Tim Fries is the cofounder of The Tokenist. He has a B. Sc. in Mechanical Engineering from the University of Michigan, and an MBA from the University of Chicago Booth School of Business. Tim served as a Senior Associate on the investment team at RW Baird's US Private Equity division, and is also the co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
