As far as private equity funds for tech companies are concerned, there is nothing bigger than Japanese conglomerate SoftBank’s Vision Fund, which started with an incredible $100 billion in its coffers. Over the years, it has made some of the biggest investment in tech and owns significant stakes in companies like WeWork and Uber, among many others. Almost all those companies have grown, and following Uber’s initial public offering earlier this year, the fund has had a windfall. However, the Vision Fund is not going to liquidate their stakes and hand over dividends to investors, which is why it is now looking for a loan to do exactly that.
Currently, SoftBank is in talks with banks like Goldman Sachs for a $4 billion loan against that stakes that the Vision Fund has in some of the leading tech companies in the world. It is believed that its holdings in cab hailing service Uber are going to be put up as stake and in addition to that its stakes Guardian Health and Slack could also be part of it. Slack is going to have its IPO soon. However, it has also been reported that the banks will need a guarantee with regards to the minimum price of the stocks in question and if the stock price goes below that pre-agreed level, then SoftBank would have to make up the shortfall.
The mega IPOs has given Vision Fund the opportunity to cash out of many of its investments, but at the same time, there is lock-in periods that investors need to abide by when it comes to businesses that have gone public recently. By taking out a loan on its stake, SoftBank will be able to return money to many of its shareholders and at the same time, it will be able to keep its part of the bargain with relation to the lock-in periods. SoftBank remains the largest stakeholder in Uber, and although it did sell a major portion of its holding following the IPO, it still holds a 13% stake in the company.