SoftBank is ready to lend up to $20 billion to its employees so they can buy stakes in a fund aimed to spark investment in cutting-edge technology companies around the globe.
Sources told The Wall Street Journal that the firm’s CEO, Masayoshi Son, may account for more than half of that amount. The money represents almost one-fifth of the sum that SoftBank put aside for its second Vision Fund.
A Vision Fund spokesman didn’t comment on the report.
SoftBank made a similar move for its first fund, which now has about $8 billion of its about 400 employees’ money. People familiar with the company explained the group’s executives believe the strategy makes employees more accountable because the investments can be canceled if a manager leaves or participates in a reckless deal. If the investments are successful, then employees can use those gains to pay back their loans, which are expected to carry an interest rate of about 5 percent.
Other investors in the fund include the government fund of Kazakhstan, which will reportedly contribute around $3 billion, while banks, including Goldman Sachs Group, Standard Chartered and Japan’s Mitsubishi UFJ Financial Group Inc., are reportedly planning to invest several hundred million dollars each.
Last week, SoftBank announced it had launched an “operating group” within its Vision Fund to create a relationship between its portfolio of investors.
The group’s head, Gerry Lopez, said the team of executives has doubled in size since it was formed late last year and now stands at 30 employees. It is expected to reach 70 by the end of the year. The team will use its experience to help the startups receiving hundreds of millions of dollars from the Vision Fund.
“What we try to bring [to all of the Vision Fund’s investments] is the perspective of someone who has operated across that industry on various different levels,” Lopez said.