In the three months leading up to September 2024, SoftBank Group of Japan surged to a 1.18 trillion yen (USD 7.7 billion) net profit as the tech behemoth benefited from rising listed company share prices in its “Vision Fund” investment vehicles.
Based on the average of four analyst estimates compiled by LSEG, the results significantly exceeded expectations for a profit of 287 billion yen (USD 1.87 billion), which contrasts with a loss of 931 billion yen during the same period in 2023.
According to the findings, SoftBank’s more cautious investment strategy is paying off. The value of Masayoshi Son’s investments in high-growth tech start-ups plummeted due to interest rate hikes, forcing the investment giant into a protracted period of retrenchment.
Since some of these valuations are now beginning to rise once more, the “Vision Fund” unit has seen an investment gain of 608 billion yen.
The unit has made money in four of the last five quarters. Additionally, the two Vision funds fully or partially exited investments totalling USD 1.85 billion.
Due to a slow IPO market, SoftBank and its “Vision Fund” investment vehicles have had few opportunities to profit from holdings in recent years, except for the successful listing of chip designer Arm in September 2023.
The South Korean e-commerce company Coupang and the Chinese ride-hailing behemoth Didi were the main contributors this quarter, driving an investment gain at Vision Fund 1 to USD 5.7 billion.
For the quarter, Vision Fund 2, which has a larger portfolio of early-stage tech startups, experienced a USD 1.17 billion investment loss.
Vision Fund 2’s USD 21 billion loss has substantially offset Vision Fund 1’s USD 22.6 billion gross gain since its founding.
Due to the ease with which dollar-denominated liabilities could be funded in yen, the yen’s recovery against the dollar during the quarter produced a gain of 289 billion yen.