SoftBank Drops $3.3 Billion on Fortress Buy

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SoftBank may be best known in tech circles for its acquisition of Sprint, but recently, it made a step forward in the tech investment world that's a lot more distributed.  In a deal valued at $3.3 billion, reports noted, SoftBank picked up the Fortress Investment Group, which itself had holdings in a variety of tech firms.

Fortress' investments were fairly widely distributed; it boasted holdings in Lyft, Jawbone, and a host of other tech operations, which made the asset manager a substantial operation in tech circles. SoftBank agreed to pay the $3.3 billion in cash outright, and represents the second time that SoftBank has done business with Fortress. Previously, SoftBank had been part of an effort to start an investment operation called the Vision Fund, a $100 billion fund—Apple was said to have kicked in one of those billions—that was under the management of Rajeev Misra, formerly of Fortress just before joining SoftBank.

Though this is a substantial investment, reports suggest that SoftBank has been rapidly dialing back its tech investment after the combined force of Nikesh Arora's departure and SoftBank's purchase of ARM. As for how SoftBank's new arm would work, word from CEO Masayoshi Son noted that the business would be run independently, as its current principals would remain in place. It would, however, also work “alongside” the Vision Fund, so there might be some new reports involved.

Son also commented, “Fortress’s excellent track record speaks for itself, and we look forward to benefiting from its leadership, broad-based expertise and world-class investment platform. For SoftBank, this opportunity will immediately help expand our group capabilities, and, alongside our soon-to-be-established SoftBank Vision Fund platform, will accelerate our SoftBank 2.0 transformation strategy of bold, disciplined investment and world-class execution to drive sustainable long-term growth.”

It would be easy to say, on the surface, that this was a good move, that SoftBank was just expanding along the lines of tech investment and moving into complementary markets where it can draw on its already extensive pool of expertise. Yet it might also be easy to suggest that SoftBank's getting a little too spendthrift, dropping billions the way a kid online uses mom and dad's credit card to run up huge in-app purchases. Considering what all has been going on with Sprint, SoftBank may want to shore up some of its earlier investments before dropping cash on new ones, lest it spread itself too thin.

That could just be a voice of excessive caution talking, though; only time will tell just how well this development works out. If nothing else, SoftBank has clearly positioned itself as a tech leader, and that may work out quite well given the advancing pace of technology markets. 




Edited by Alicia Young
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