How SoftBank’s massive Vision Fund shares profits — and losses

LONDON • Partners at SoftBank Group Corp’s US$100 billion (RM410 billion) Vision Fund will share the potentially enormous profits from their …

By BLOOMBERG

LONDON • Partners at SoftBank Group Corp’s US$100 billion (RM410 billion) Vision Fund will share the potentially enormous profits from their investments, including on start-ups like Uber Technologies Inc. They’ll also be on the hook when those bets backfire.

SoftBank has set up an unusual compensation structure for the fund that includes a US$5 billion loan to employees. The debt is swapped for equity in the fund and will generate profit when deals make money — and losses when they don’t, scaled by seniority, according to people with knowledge of the situation.

The compensation scheme is more extreme than the typical venture capital or private equity fund because of the downside risk, as well as the record size of the investment pool. Vision Fund employees, including high-profile bankers and investors, receive base salaries and bonuses, but only get payouts when profits are booked.

“It aligns interest,” said Chris Lane, an analyst at Sanford C Bernstein & Co, who discussed the matter with officials at SoftBank.

“Effectively, they are an equity owner, like everybody else, and not in a privileged position above everyone else. I think it’s fair.”

Clawback Provision

Investors in private equity funds often push for what’s known as a clawback provision, which allows them to reclaim part of the profits taken by managers if initial gains are later wiped out. Such terms are especially sought after in funds that invest in risky assets or cyclical industries characterised by wild price swings.

At Vision Fund, partners will face a clawback of 20% and above, depending on seniority, the people said. More junior staff will be liable for about 7% of any losses out of their US$5 billion pot, including interest.

SoftBank’s billionaire founder, Masayoshi Son (picture), has been allocated the majority of the bonus pool, they said. Son has a net worth of US$13 billion, making him Japan’s third-richest person, according to an estimate by the Bloomberg Billionaires Index. A representative of the Vision Fund declined to comment because the matter is private.

Pay at the Vision Fund has been the subject of speculation ever since Son originally announced the effort in October 2016. It’s the largest investment fund in history, amplifying the potential rewards and losses. And as with most things related to SoftBank’s giant technology fund, it’s not straightforward.

The US$5 billion equity allocation to the fund’s staff is split up into tranches with various conditions attached, and payouts can vary widely depending on performance.

‘Skin in the Game’

“It’s encouraging if people are trying to make the idea of having skin in the game meaningful,” said Stefan Stern, the former head of the High Pay Centre and now a visiting professor at Cass Business School. “But you would want to be certain that the downside risk is real.”

The average venture capital fund tends to pay out 20% of any profit to workers. While many funds require managing partners to put up some of their own money, it’s usually a small portion of the total. That limits their losses.

Vision Fund is headed by Rajeev Misra, formerly of Deutsche Bank AG and UBS Group AG. Managing partners include another Deutsche Bank veteran, Saleh Romeih, Goldman Sachs Group Inc alum Michael Ronen, and Deep Nishar, who worked at Google LLC and LinkedIn Corp.

Misra’s team has backed about 67 companies so far, including Uber, Didi Chuxing and WeWork Cos. Son has said he plans to raise a new US$100 billion fund every two or three years and will invest about US$50 billion a year.

“It’s possible that hungry dogs hunt best,” said Bill Aulet, a professor at the MIT Sloan School of Management who tracks the industry. “But creating a structure that forces venture capitals to put more skin in the game might narrow the talent pool to the wealthy few who can afford it.”

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E-health gets 40% more VC funds in 2018

… a health and fitness platform that received Rs 824 crore ($120 million) in series-C funding led by IDG Ventures, Accel Partners, and Kalaari Capital.
Rupali Mukherjee | TNN

Mumbai: Venture capital (VC) funding in digital health for Indian companies, including private equity and corporate venture capital, jumped nearly 40% in 2018 — aggregating $204 million in 51 deals. There were 48 domestic digital health companies that received VC funding, while six M&A transactions were recorded during the year.

The largest domestic deal was CureFit, a health and fitness platform that received Rs 824 crore ($120 million) in series-C funding led by IDG Ventures, Accel Partners, and Kalaari Capital. In 2017, the largest deal was Practo, a physician search engine used to book appointments, closing $55 million in a series-D round led by Tencent Holdings. For Q4 2018, digital health companies raised $20 million in seven deals, lower from $138 million in 12 deals in the previous quarter, data culled from global research firm Mercom Capital said.

There were six M&A deals in 2018 with most transaction details not disclosed, including online e-pharmacy Medlife’s acquisition of telemedicine platform EClinic24/7. Others included health and fitness platform CureFit’s move to enhance its mental wellness business — Mind.fit. This was done with the acquisition of Bengaluru-based mental health and wellness services provider Seraniti. Additionally, Symple Wellness Platform acquired AllizHealth, a provider of cloud-based wellness and preventive healthcare solutions, and e-commerce company Myntra bought Witworks, a maker of smartwatches, in the home and lifestyle space.

Persistent Systems acquired Herald Health (a digital health startup that enables doctors to manage electronic medical records more effectively) for an enterprise valuation of $5.2 million. In another deal, online pharmacy Netmeds acquired telemedicine app JustDoc for a little under $1 million.


The increase in India mirrors the global trend with VC funding up at a huge 32% raised in 698 deals, aggregating $9.5 billion during the year. Total corporate funding for digital health companies — including debt and public market financing — touched $13 billion in 2018, which is a 58% increase year-on-year.


Globally, consumer-centric companies brought in $5.2 billion in 447 deals in 2018, which was higher by 24% in 514 deals in the previous year, while practice-centric companies raised close to $4.3 billion in 251 deals — a 43% jump compared to $3 billion raised in 264 deals in 2017.


The highest funded categories in 2018 include data analytics ($2.1 billion), m-health apps ($1.3 billion), telemedicine ($1.1 billion), mobile wireless technology companies ($847 million), clinical decision support ($714 million), and wearable sensors technology companies ($703 million).


Analytics, m-health apps, telemedicine and mobile wireless technology companies witnessed significant year-on-year (YoY) funding growth, while data analytics remained the top-funded category, the research firm said.

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Portag3 Ventures expands into Europe, adds Hélène Falchier as partner

“I am thrilled to be joining the Portag3 team as we continue to invest in and help build great financial technology companies,” Falchier said. “Portag3’s …

Toronto-based Portag3, an early-stage FinTech investor, announced that Hélène Falchier has joined their team as a new partner.

Based in France, Falchier will assist the Portag3 investment team with a focus on sourcing and driving investment opportunities in Europe.

“Hélène Falchier was a champion of FinTech long before it was en vogue,” Adam Felesky, co-founder and CEO of Portag3, said. “We’re honored to have someone of her calibre and experience driving our investment efforts in Europe. Hélène’s unique leadership skills and expansive network will help us identify the best opportunities and invest in the top entrepreneurs in the region.”

Based in France, Falchier will assist the Portag3 investment team with a focus on sourcing and driving investment opportunities in Europe.

Previously, Falchier was at CNP Assurances for 11 years, where she was CEO of its corporate venture program, Open CNP. She was also CNP’s head of private equity, where she dealt with a portfolio of €7.5 billion with investments in Europe and the U.S.

“I am thrilled to be joining the Portag3 team as we continue to invest in and help build great financial technology companies,” Falchier said. “Portag3’s team, vision, long-term view of investing, active involvement in portfolio companies and global reach attracted me to the platform.”

Falchier also acted as chairperson of the AFIC LP’s Club (French Association for Investors for Growth). Portag3 had formerly worked with Falchier when she was director of Alan, a French online health insurance company, in which both Open CNP and Protag3 had invested in 2016.

Portag3 had recently reported the $198 million closing of Portag3 Ventures II LP, its second FinTech venture fund that hones in on early stage investments in the global financial technology sector. Outside investors include the National Bank of Canada and Intact Financial Corporation. Portag3 says subsequent closings are expected to bring Fund II commitments to over $300 million.

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Hercules Technology Growth Capital Inc (NYSE:HTGC) Sentiment Change Report at 1.48

In addition, Benchmark Capital Advisors reported 239,017 shares in Hercules Technology Growth Capital Inc equivalent to 2.36% of its stocks portfolio …

Hercules Capital, Inc. (NYSE:HTGC) Corporate Logo

Positions for Hercules Technology Growth Capital Inc (NYSE:HTGC)

In Q3 2018 Hercules Technology Growth Capital Inc (NYSE:HTGC) big money sentiment increased to 1.48, according to Securities and Exchange Commission filings. That’s up 0.13, from 2018Q2’s 1.35. 77 hedge funds opened new or increased positions, while 52 sold and decreased their equity positions in Hercules Technology Growth Capital Inc so the sentiment is more positive. Funds own 31.89 million shares, up from 31.31 million shares in 2018Q2. Funds holding Hercules Technology Growth Capital Inc in top 10 changed to 4 from 3 for an increase of 1. 12 Investors Sold All; 40 Reduced Holdings; 47 increased stakes while 30 hedge funds bought stakes.

Significant Hercules Technology Growth Capital Inc Investors

As of Q3 2018 Muzinich & Co. Inc. has 4.3% invested in Hercules Technology Growth Capital Inc. Hercules Technology Growth Capital Inc’s shareholder Shanda Asset Management Holdings Ltd owns 1.63 million shares as of Q3 2018. In addition, Benchmark Capital Advisors reported 239,017 shares in Hercules Technology Growth Capital Inc equivalent to 2.36% of its stocks portfolio. Gilman Hill Asset Management Llc revealed 355,389 shares position in Hercules Technology Growth Capital Inc. The Pennsylvania-based fund S&T Bank Pa holds 683,581 shares or 1.68% of their stocks portfolio.

Hercules Capital, Inc., formerly known as Hercules Technology Growth Capital, Inc., is a business development firm specializing in providing venture debt, debt, senior secured loans, and growth capital to privately held venture capital-backed companies at all stages of development including select publicly listed companies and select special opportunity lower middle market companies that require additional capital to fund acquisitions, recapitalizations and refinancings and established-stage companies.The company has $1.20 billion market cap. The firm provides growth capital financing solutions for capital extension; management buy-out and corporate spin-out financing solutions; company, asset specific, or intellectual property acquisition; convertible, subordinated and/or mezzanine loans; domestic and international expansion; vendor financing; revenue acceleration by sales and marketing development, and manufacturing expansion.The P/E ratio is 9.81. It provides asset financing with a focus on cash flow; accounts receivable facilities; equipment loans/leases; equipment acquisition; facilities build-out and/or expansion; working capital revolving lines of credit; inventory.

Ticker’s shares touched $12.42 during the last trading session after 0.89% change.Currently Hercules Capital, Inc. is downtrending after 10.70% change in last January 21, 2018. HTGC has 309,644 shares volume. HTGC underperformed the S&P500 by 10.70%.

Earnings report for Hercules Capital, Inc. (NYSE:HTGC) is anticipated on February, 28., according to Faxor. Analysts expect change of 6.90 % or $0.02 from previous year’s $0.29 EPS compared to current’s $0.31 EPS. If the current EPS of $0.31 is accurate, HTGC’s profit could be $29.83 million. Wall Street predicts 0.00 % EPS growth as of February, 28.

Comerica Savings Bank holds 15,859 shs or 0% of its capital. A D Beadell Invest Counsel owns 0.93% invested in Hercules Capital, Inc. (NYSE:HTGC) for 83,865 shs. Blackrock has 459,700 shs for 0% of their capital. Moreover, State Street Corporation has 0% invested in Hercules Capital, Inc. (NYSE:HTGC) for 22,683 shs. Raymond James & Assocs stated it has 324,618 shs or 0.01% of all its holdings. Monarch Prns Asset Mgmt Ltd Liability Company reported 299,378 shs or 0.36% of all its holdings. 122,801 are held by Taylor Frigon Limited. First Republic Investment Mgmt Inc stated it has 11,919 shs. Suntrust Banks Inc has invested 0% in Hercules Capital, Inc. (NYSE:HTGC). Dnb Asset As holds 0% or 68,139 shs in its capital. Granite Invest Prtnrs Limited Liability Company holds 1.23 million shs or 0.93% of its capital. Sg Americas Secs Limited Liability Corporation reported 0% stake. Pinebridge Invests L P stated it has 58,777 shs. Financial Bank Of New York Mellon holds 108,624 shs or 0% of its capital. Salzhauer Michael holds 0.13% or 25,000 shs.

Hercules Capital, Inc. (NYSE:HTGC) Ratings Coverage

Total analysts of 3 have positions in Hercules Capital (NYSE:HTGC) as follows: 3 rated it a “Buy”, 0 with “Sell” and 0 with “Hold”. The positive are 100%. Since August 6, 2018 according to StockzIntelligence Inc Hercules Capital has 3 analyst reports. On Thursday, August 16 JMP Securities maintained the shares of HTGC in report with “Market Outperform” rating. On Monday, November 5 the firm has “Outperform” rating by Wells Fargo given. On Monday, August 6 Wedbush maintained the shares of HTGC in report with “Outperform” rating.

For more Hercules Capital, Inc. (NYSE:HTGC) news released briefly go to: Businesswire.com, Businesswire.com, Businesswire.com, Nasdaq.com or Seekingalpha.com. The titles are as follows: “Hercules Capital Announces Share Repurchase Program – Up To $25.0 Million Representing Approximately 2.4% of Common Stock Outstanding(1) – Business Wire” released on December 18, 2018, “Hercules Capital Completes Outstanding Fourth Quarter Originations Activity and Achieves All-Time Record of More Than $1.21 Billion in Total New Debt and Equity Commitments in 2018(1) – Business Wire” on January 07, 2019, “Hercules Announces Its Intention to Fully Redeem its 6.25% Notes due 2024 – Business Wire” with a publish date: December 11, 2018, “Hercules Capital Provides US$15M From Existing Facility for Mesoblast to Accelerate Product Commercialization Programs – Nasdaq” and the last “Hercules Capital: This 6.25% Baby Bond Has Begun Trading On The NYSE – Seeking Alpha” with publication date: September 29, 2018.

Hercules Capital, Inc. (NYSE:HTGC) Institutional Investors Chart

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SoftBank’s $100 bln Vision fund shares profits and losses with partners: Bloomberg

SoftBank Group Corp.’s $100 billion Vision Fund has set up an unusual compensation structure for partners that allows them to share in potential …

SoftBank Group Corp.’s $100 billion Vision Fund has set up an unusual compensation structure for partners that allows them to share in potential enormous profits of its investments and also those deals that backfire, Bloomberg reported. The fund, which includes a $5 billion loan to employees, swaps debt for equity, generates profits when transactions make money as well as losses when they don’t, the story said.