Soft Bank’s Special Purpose Acquisition Company

Summary

At the Virtual Milken Conference hosted by Bloomberg News, Rajeev Misra Soft Banks Head of
Vision Fund has announced plans to introduce Soft Bank’s own Special Acquisition Company (SPAC),
in the coming two weeks. The Japanese Conglomerate has changed course since getting a beat from
the WeWork investment, and has since then raised US$41 billion by selling stakes in T-Mobile US
Inc., Alibaba Group Holdings Ltd and it has also signed a US$40 billion deal to sell ARM to Nvidia
Corp. Sources close to Soft bank stated that it is speaking with potential arranges such as Goldman
Saches Inc. and Citigroup Inc. in listing the SPAC. Softbank’s SPAC would be handled by Vision Fund
2’s investment advisers, and it being financed by Softbank’s own capital, and providing opportunity
to third party investors. The SPAC shall focus on later stage growth companies that are seeking to go
public within the next 9 – 12 months. The exact size of the SPAC isn’t confirmed however, Misra
hinted that Softbank could invest US$500 million.

Market Implications

SPAC are making a comeback, and we predicted growth for Softbank’s new venture. In 2019 SPAC
markets had raised $13.6 billion with 59 deals, and this year US$53 billion has already been raised
across 138 SPAC IPOs. The market seems, to positively accept trades of this sort, and with investor
demand for these ventures rising we could see more trades, thus early buying of these stocks is
recommended.

Client Implications & Positioning Structure

As a High Net Worth client, seeking long term sustainable investments, we recommend you consider
investing in Softbank’s upcoming SPAC, as the firms, plans and current market statement point out
to something big happening in the coming two weeks. It is also worth noting that this venture of
Softbank would combine its expertise in tech sector and generating a new focus on public stock
trading.

A BUY AND HOLD recommendation is given on the SOFTBANK SHARES

A BUY AND HOLD recommendation is given on the new SPAC shares once listed

A BUY is recommended on Nvidia Corp.

 Client Profile

Client Name: Mr. Abhinav Ambani

Age: 47 Years

Occupation: Real Estate Mogul

Investment Capital Available: US$ 50 million

Investment Objective: Long Term Value Growth

Risk Appetite: Medium High

Unique Needs: An ethical concern raised as not to invest in companies that manufacture Alcohol
and Tobacco products

Client Brief

Our client is a High Net Worth Individual, based in India and prefers long term value growth
investments, rather than short term trade gains. When drafting his Investment Policy statement, the
clients had specifically mentioned, that he is looking for an investment time horizon for more than
15 years and has a keen interest in investing in forward tech companies, that are the game changers.
The client has a keen interest in Artificial intelligence and does not invest in Companies that produce
Alcohol and Tobacco products. The client has made available US$50 million dollars to invest in Tech
companies, and as per our last discussion he was in search for something new and exciting, that is
not found a normal trading day. The client had been fascinated by the activities of Softbank and its
investment portfolio and had instructed us to keep an eye on its upcoming ventures that would be
made public. The client wishes not to investment real estate and bonds, as he requires assets that
could be turned into liquid cash in a shorter term.

Article 1

Publication Date: 14 October 2020, 4.32 GMT +12

Link: https://www.bloomberg.com/news/articles/2020-10-13/softbank-armed-with-billions-in-
cash-joins-blank-check-binge?srnd=markets-vp

Article Text:

SoftBank Group Corp. is making another surprising strategic move with plans to introduce its
own blank-check company in the next two weeks.
Rajeev Misra, head of SoftBank’s Vision Fund, made the disclosure Monday in a virtual
interview at the Milken Conference on a panel hosted by Bloomberg News. SoftBank is
planning to invest its own cash in the special purpose acquisition company, or SPAC, at the
same time public investors put in their cash. That would provide a shell for a promising
private company to go public in the future, even if the markets turn rocky.
SoftBank is in talks with potential arrangers including Goldman Sachs Group
Inc. and Citigroup Inc. about the SPAC listing, according to two people familiar with the
matter. The Japanese company’s second Vision Fund could invest in the SPAC, one person
said.
“We’re going to do a SPAC ourselves, with our own capital, as an investment vehicle,” Misra
said. “It’s ideal for companies that were ready to go public 12 months from now and want to
do it with certainty maybe six months earlier.”

Blank-check firms ask investors to put money in a stock before knowing which company
they’re backing. The SPAC manager then chooses a company, typically one that’s privately
traded, and pursues a merger that lets the startup go public and inherit the capital raised.
The first few years following the launch of the $100 billion Vision Fund in 2017 were marked
by a hurricane of dealmaking by SoftBank, as the unit built up its portfolio of startups. But
after losing billions from its investment in WeWork, the Japanese conglomerate has changed
course. It’s raised 4.3 trillion yen ($41 billion) by selling stakes in holdings including T-
Mobile US Inc., Alibaba Group Holding Ltd. and its domestic telecom unit. SoftBank has also
signed a $40 billion-deal to sell Arm to Nvidia Corp.
SoftBank is now looking at ways to deploy the cash it’s raised, and has recently launched an
asset management unit that’s putting money into public securities. However, Misra
dismissed reports the company was a “whale” responsible for roiling public tech markets.
“Are we buying a few billion of other stocks to diversify away from the Alibaba we sold in the
past six months?” Misra asked. “We’re still sitting on a lot of cash. It’s a liquidity-
management strategy, it’s a diversification strategy.” SoftBank’s SPAC will target later-stage
growth companies, and be part of SoftBank Investment Advisors, the investment arm that
houses the Vision Fund. While the exact size of the SPAC wasn’t clear, Misra hinted that
SoftBank could invest $500 million. The Vision Fund has backed scores of startups,
including WeWork, Didi Chuxing Inc. and Grab Holdings Inc.. Misra didn’t comment on
whether SoftBank would use SPACs to take its portfolio companies public, though many of
them would likely consider an initial public offering in the next year or so. “A SPAC is right
for a good growth company which had plans to go public a year from now or nine months
from now and uses this window of buoyant capital markets,” Misra said. So far this year,
more than 100 SPACs have raised over $40 billion on U.S. stock exchanges. One of the
Vision Fund’s own companies, property technology firm Opendoor, said last month it
was going public through a merger with a blank-check company led by Chamath Palihapitiya,
a prolific SPAC manager. Misra argued that SPACs are a result of surging public markets,
where investors are striving for new opportunities. He cautioned they can be abused and that
investors need to pay careful attention to management talent, sponsor fees and other details.
Misra gave a hypothetical example of a “good growth company” that wants to raise $1 billion
at a valuation of $3 billion and later go public. “We say we want to invest in you,” he said.
“The deal is we’ll put in $500 million, we’ll raise $500 million in a SPAC fundraising. It’s just
an investment in the company.”

— With assistance by Gillian Tan

Article 2

Publication Date: 13th October 2020, 12.30pm

Link: https://markets.businessinsider.com/news/stocks/softbank-vision-fund-2-plans-launch-own-
spac-rajeev-misra-2020-10-1029672962#

Article Text:
Rajeev Misra, the head of SoftBank's $100 billion Vision Fund, is joining the SPAC race, as
he seeks to capitalize on the trendy new investment vehicle. At the 2020 Milken Institute
Global Conference on Monday, Misra said he would outline plans for the blank-check
company in the next two weeks, but did not provide further details. The SPAC will be
handled by Vision Fund 2's investment advisers, and will include capital from both external
investors and the fund itself, CNBC said, citing a source. The Vision Fund is primarily
known for its investments in startups. The group has poured cash into technology-
forward companies including Uber, WeWork, Slack, Nvidia, and ARM. 

The follow-up fund, Vision Fund 2, is aimed at investments in artificial intelligence-

based technology. The blank-check venture would combine the Japanese conglomerate's
expertise in tech investments and its new focus on public stock trading. Earlier this year,
SoftBank's asset management business invested nearly $3.9 billion across some of the
world's most popular stocks including Amazon, Tesla, Alphabet, and Netflix. It planned to
invest more than $10 billion in public companies. Wall Street's obsession with SPACs has led
to a surge in popularity this year, with many high-profile investors piling into this alternative
investment route.  Over $53 billion has been raised across 138 SPAC IPOs so far this year,
according to SPACInsider.com. Last year saw only $13.6 billion raised across 59 deals.
The average size of SPAC IPOs climbed to $388 million this year, from $230 million in 2019.