Softbank’s Vision Funds book record £31bn loss – but Alibaba sale helps cushion the blow

Japanese investment giant Softbank shed records amount of cash from its storied Vision Funds last year even as a slew of asset sales and tech rebound helped narrow losses across the firm.

Softbank’s Vision Fund unit, which became known for splashy bets on tech firms at the height of the tech boom, booked an investment loss for the full year of 5.28 trillion Yen (£31bn) after a plunge in the valuation of its portfolio.

But annual losses across the group narrowed sharply after the firm raised $35.46bn through prepaid forward contracts using Alibaba shares, Reuters reported. 

Overall, Softbank notched a net loss of 970bn Yen (£5.65bn) for the year ended March 31, compared with a 1.7 trillion yen loss a year earlier.

Softbank has been forced onto a defensive footing over the past 12 months as tech valuations globally tumbled and dragged down the value of its investments. 

In the three months to March, the Vision Fund portfolio was marked down by $2.3bn to $138bn, marking the investing arm’s fifth consecutive quarter of losses. Investments from the Vision Fund unit slowed sharply to just $3bn for the full year.

Softbank also slashed the value of private portfolio companies in both the first and second of its funds. At the end of March, the second fund’s portfolio was worth $31bn compared with an acquisition cost of $49bn.

Chief Masayoshi Son said last year he was “ashamed” of his previous focus on chasing profits and has since stepped back from managing the firm’s investments to focus on the US listing of British chipmaker Arm.

The firm is leaning on the listing of Arm in New York to deliver a wave of cash after a dour period for stock market listing globally. 

Bankers have reportedly pitched valuations of between $30bn and $70bn for the firm’s float, Bloomberg reported, as wild swings in semiconductor equity prices make the eventual pay-off uncertain.