Blackstone chief praises Masayoshi Son's investment mettle

February 02, 2018 18:34
Blackstone Group chairman and  CEO Steve Schwarzman said he sees few financial institutions as "aspiring" as his own firm, with the exception of Masayoshi Son's SoftBank Group. Photo: Bloomberg

The head of the world’s biggest private equity firm paid tribute to Masayoshi Son, founder and chief executive of SoftBank Group Corp., for his investments in the field of technology.

On a conference call with analysts on Thursday, Steve Schwarzman, chairman and chief executive of Blackstone Group LP, said he sees few financial institutions as "aspiring" as his own firm, with the exception of Son's SoftBank, Bloomberg reports.

“He’s bold, he’s sleepless, he’s aggressive, and he’s picked an area in which to invest which, for the most part, doesn’t have cash flow,” Schwarzman said of Son. “He’s an outlier in terms of his – not to beat the phrase – vision.”

Son's Vision Fund, a technology fund with a US$100 billion target, has acquired stakes in a wide range of tech companies including Uber Technologies Inc., Slack Technologies Inc., WeWork Cos., Didi Chuxing and NVIDIA.

In 2017 the fund made 100 investments worth a combined US$36 billion, according to alternative assets data and intelligence provider Preqin.

“The amount of money that can be deployed in a whole industry that really suffers from lack of cash flow – in effect, negative cash flows to get to break even – that’s a highly specialized set of characteristics,” Schwarzman was quoted as saying.

“What he’s done, quite brilliantly actually, is gone out to be the defining institution in that asset class.”

Oaktree Capital Group LLC co-chairman Howard Marks also wrote about the risk of Vision Fund in a memo last July, Bloomberg said.

Marks was doubtful as to whether it was skill or luck that had contributed to the fund's success and whether it could keep disciplined when “deploying a sum of its size in the technology industry”.

“The willingness of investors to invest in a shockingly large fund for levered tech investing with a questionable structure is a further indication of an exuberant, unquestioning market,” he wrote in his memo.

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