World's largest fund - the $100 billion SoftBank Vision Fund (SVF) - evaluated investing in Jio Platforms and Reliance Retail but its expectations were higher than what the two firms would deliver, Rajeev Misra, CEO of SoftBank Vision Fund told BusinessToday.In in an exclusive interview. Misra was responding to a query on whether SVF regretted not being an investor in Jio and Reliance Retail. "We evaluated Jio Platforms, Reliance Retail," says Misra.
Eventually, SoftBank decided against investing at a time when global investors were queueing up to own a part of the two firms.
SoftBank's contra decision comes in the wake of a stream of investments into the two Reliance firms that have raised Rs 1.52 lakh crore and Rs 47,265 crore, respectively, so far. The Rs 2 lakh crore investing spree right through the COVID-lockdown is continuing till date. Investors in Jio and Reliance Retail include marquee names such as Facebook, Google, KKR, Intel Capital, General Atlantic, Qualcomm Ventures, among others. SoftBank which evaluated the investments decided against putting in the funds.
"SoftBank is sitting on over $50 billion of cash today which will go to $80-90 billion. Plus we will diversify some of our public stock like in Alibaba which is close to $180 billion, slowly from China exposure to global exposure," says Misra. "We have a lot of firepower. The objective is to invest in AI-driven companies that are disrupting the existing economy and companies over the next 3-4 years."
SVF reported a surprise $18 billion in profit in the first half of the current fiscal after shocking the world with $17.7 billion loss in FY20 ended March.
"Why have we deployed only $3 billion in SVF II in the last 7 months? We used to do one single investment of $10 billion - Uber or Didi. Because investment opportunities are limited. It's not that we don't see every investment. We are one of the biggest technology investors. We see them all."
Besides, Jio Platforms and Reliance Retail would, perhaps, not need the kind of hand holding SVF is used to with its investee companies. "There is capital and there is capital - with help. Vision Fund is different. Very different from all others. We are not just capital. Between Fund I & II, we have 105 companies now. And the group, as telecom company in Japan, as Alibaba, companies in China, T-Mobile, if you look at our eco-system we help these companies get business across the world," says Misra.
How does the SVF deal with the regulatory, business and political uncertainties engulfing the world due to heightened economic nationalism? "If you have a 5-year view, will probably slow down things. The China-US trade war: we sit in the middle being a big investor, perhaps, the biggest foreign investor in US. And one of the biggest foreign investments in China. We sit in the middle. We have to navigate it. But nobody's going to stop disruption. You have to look at a 5-year view and see is the world going to be different with 5G, autonomous vehicles, more and more activity online where the cost of doing business will be a lot less than having a restaurant and producing food? There is no debate. We have to navigate geo-politics and regulation, regulatory changes," says Misra. "You just have to believe in your thesis of what the world is going to look like in the next three to four years from now and invest on that basis. And we are the biggest collection of disruptive companies under one roof on the planet - by a margin."