Japan's SoftBank Group Corp Chief Executive Masayoshi Son bows his head after his presentation at a news conference in Tokyo, Japan, Nov. 5, 2018. REUTERS/Kim Kyung-Hoon/HONG KONG, Aug 8 - In the British nursery rhyme, the Grand Old Duke of York marched his men up and down a hill to no effect. SoftBank Group
evokes similar feelings of futility. When markets go up, so does the $67 billion group’s performance – not to mention the braggadocio of founder Masayoshi Son. With markets go down, as they did in the last three months, it reported a record $23 billion net loss. Son kept his presentation short, answered questions and talked of learning lessons.
Writedowns and realised losses in SoftBank’s venture capital-like Vision Funds accounted for the vast bulk of the hit. The companycumulative gains from the funds had shrunk to 112.2 billion yen from 3.05 trillion yen as recently as March. Weak markets were the biggest single driver. But the scale of the losses suggests Vision Fund managers may have been as bearish as possible on some investments yet to be taken public. That produces an overly flattering performance if markets recover.
In the meantime, investors might want to draw their own lessons via a comparison of SoftBank to the Nasdaq Composite. Over the five-odd years since the first Vision Fund was formed, the tech-heavy U.S. index has produced a total return of 107% while SoftBank shares have produced a mere 31%. When the Duke of York’s men were halfway up, they were neither up nor down. That’s about the best that can be said of SoftBank right now.SoftBank Group on Aug.
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