SoftBank Group Corp. Chairman and CEO Masayoshi Son speaks during a press conference on November 6, 2019 in Tokyo, Japan.
Tomohiro Ohsumi | fake images
Masayoshi Son, chief executive of Japanese tech conglomerate SoftBank, told shareholders on Wednesday that he wants to be seen as a 21S t Rothschild century.
The billionaire said many people have asked him over the past three or four years what SoftBank Group is, and some have told him that they like him “a lot” as an entrepreneur but not as an investor.
“I’m not really a simple or traditional investor compared to everyone else,” Son said. “I’ve been feeling a bit frustrated. What is the best way to explain what SoftBank is? What is Masayoshi Son? “
Son said he would describe SoftBank as a “provider of capital for the information revolution” on the 21S t century in the same way that Mayer Amschel Rothschild was a provider of capital for the industrial revolution in the 19th century.th century.
A presentation slide from Softbank’s 41st Annual General Meeting of Shareholders.
“In the industrial revolution, one of the major players was Rothschild,” Son said, using one of the wacky slideshows SoftBank has become known for to illustrate his points. “We would like to be the provider of capital for the information revolution. That is our new definition or new positioning, I would say to describe SoftBank Group ”.
Son said there were “many famous inventors (who) did great work” during the industrial revolution, referring to steam engine pioneer James Watt.
“But that industrial revolution didn’t happen just because of inventors,” he said, adding that capitalists were just as important. “Mr. Watt is quite famous, but Rothschild, as a capitalist, may not be fully understood, may not be fully appreciated,” Son said.
Information revolution in full bloom
Today, the “information revolution (is) in full bloom,” according to Son, who said artificial intelligence is a particular area of focus for SoftBank.
“We believe that we are the largest in terms of providing capital,” he said of AI, adding that driving, healthcare, retail, finance and education will be redefined by AI in the coming years.
In the industrial revolution, labor was replaced by machines, Son said. “In the information revolution, AI will be the one to replace machinery,” he said.
SoftBank has invested in 264 companies through its two Vision Funds, as well as a fund dedicated to Latin America.
“Most companies aren’t really making money,” Son said. “We are taking risks and at the same time providing funds … as providers of capital.”
Net asset value is a key metric SoftBank looks at when measuring its own performance, Son said. At the end of March, SoftBank’s net asset value was about 26 trillion Japanese yen ($ 235 billion), Son said, adding that it fluctuates daily, standing at about 25 trillion yen today.
There have been four main drivers for SoftBank’s business over the years, Son said. Initially it was Yahoo, then it was SoftBank Mobile, and finally it became the Chinese e-commerce giant Alibaba. But recently, the Vision Fund is “taking a good net asset value advantage,” Son said, adding that he himself “has put in a lot of time.”
Son claimed that SoftBank has posted an internal rate of return of 43% each year for the last 25 years, noting that banks provide less than 1% and asset management companies are 8-10%.
“Until last year, the Vision Fund was criticized or had a hard time,” Son said. “People used to say that Masa is not that young anymore, so Masa is not as good as before and Masa becomes too greedy or you don’t have a lot of money or a lot of hair anymore … but we finally started to see some recovery.”
With that said, Son admitted that there are “many lessons” SoftBank has learned after the big bets on loan issuer Greensill, office space provider WeWork, and dog-walking app Wag turned sour. “Sometimes I felt embarrassed by those hard lessons,” he said.