SoftBank Takes the Lion’s Share of Vision Fund Gains

SoftBank stands to win or lose the most from its $97.7 billion Vision Fund, while outside investors face much less risk, but also stand to get far less of the upside. It’s a reminder that all investors aren’t created equal.

As a result of the fund’s unusual structure, SoftBank could take more than half of the gains if the fund triples in value, despite only having a one-third interest in the fund, according to an analysis by The Information. Indeed, SoftBank’s earnings statement Monday said it received as income 59% of the fund’s gains during the six months ended Sept. 30. The fund rose in value by $1.7 billion during that period.

No subscription? You’re missing out.
Join the high-powered community of tech and business leaders who rely on The Information’s original news and in-depth reporting.
Subscribe to read the remaining 712 words of this article.
What’s included in a subscription?
Read The Information’s original, in-depth reporting and analysis
Receive as-they-happen articles via email
Talk with award-winning reporters in subscriber-only conference calls
Join the conversation on our subscriber-only Slack channel
Attend intimate, high-powered events with leaders in tech and business
Subscribe to The Information

The Information’s calculations are based on a simplified version of the fund, assuming even investment of $97.7 billion across the first five years and full investment afterward, and not accounting for differences in timing of individual investments. Should the money raised by the fund increase beyond $97.7 billion, results would change, and any waiving or decrease in management fees over time would lower SoftBank’s take. Calculations also didn’t include administrative or operating expenses of the fund.

Login or Subscribe to follow the discussions happening here and real-time in our   Slack Community.
Read comments from top tech and industry leaders
Joe Lonsdale
Joe Lonsdale
Founding Partner, Eight
Chamath Palihapitiya
Chamath Palihapitiya
Founder & Managing Partner, SocialCapital
Tina Sharkey
Tina Sharkey
CEO, Brandless
Jonah Peretti
Jonah Peretti
CEO, Buzzfeed
Adam D'Angelo
Adam D'Angelo
CEO, Quora
Brit Morin
Brit Morin
Founder & CEO, Brit + CO
Dustin Moskovitz
Dustin Moskovitz
Co-Founder, Asana
Christina Miller
Christina Miller
President & General Manager, Turner
Max Levchin
Max Levchin
CEO, Affirm
Adam Mosseri
Adam Mosseri
Director of Product, Facebook
Alex Mather
Alex Mather
The Athletic
Martha Josephson
Martha Josephson
Partner, Egon Zehnder
James Murdoch
James Murdoch
Co-Chief Operating Officer, 21st Century Fox
Andrew Kortina
Andrew Kortina
Founder, Venmo
Ben Chestnut
Ben Chestnut
Co-Founder & CEO, Mailchimp
Ruchi Sanghvi
Ruchi Sanghvi
VP Operations, Dropbox
Should the fund drop in value, SoftBank could shoulder all the fund’s losses. In a more typical fund structure, investors receive a share of gains or face losses equivalent to their interest in the fund, before fees.