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SoftBank’s asset sales, COVID-19 portfolio hit to rattle Vision Fund 2 investors
The overall downturn in markets due to the coronavirus coupled with the large decline in oil prices will, in particular, deter Saudi Arabia’s sovereign wealth fund, one of SoftBank Vision Fund’s biggest investors, from investing in Vision Fund 2, said Olamide Ajibesin, managing director of transaction advisory services practice at Anchin Block & Anchin LLP. Oil prices dropped more than 6% to an 18-year low last week due to dampened global demand.
Ajibesin added that the risk and impact of the virus have not made the current market conditions “high-multiple-friendly.” This could mean SoftBank’s assets will sell at a discount, and that it would have less cash, and ultimately this would affect investors’ confidence in Vision Fund 2.
“We are already seeing some slowdown in deal-making due to the virus … the [recent announcement of] transactions, including the asset sale timeline of one year, could also be delayed, and this could delay the Vision Fund 2 launch,” Ajibesin added.
Read the complete article by S&P Global