Masayoshi Son has a long history of zigging where others zag. His SoftBank made a fortune as a Japanese software reseller, then he made well-timed investments in Yahoo Japan and Yahoo itself. His more recent investments follow no set pattern: Sprint is a possibly also-ran U.S. Cellular network, and ARM is an extremely expensive microchip designer.
Now the billionaire Japanese entrepreneur of Korean descent—if you know anything about Japanese business culture you understand how unusual Son is right there—is at it again. SoftBank announced Wednesday it is buying the hedge fund and investments-strategies firm Fortress. It is Son’s second major investment move of late, his first being the partnership he forged with a Saudi Arabian sovereign wealth fund to invest $100 billion in technology companies.
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It’s a curious strategy. It’s not like technology companies lack financing options right now. Tech concerns from three kids in a garage to megacaps like Microsoft readily can find capital that runs the gamut from “angel” venture capital to high-grade debt. For his part, Son seems to be flitting about a bit. He hired and fired the ex-Google honcho Nikesh Arora to run this effort. He has flirted with the new Trump administration, very likely an effort to revive his efficiencies-producing dream of merging Sprint with T-Mobile in the U.S.
Yet with his Fortress buy, Son may again be showing good timing. The firm has $70 billion in assets, but the value of its holding company is down considerably from its IPO. That’s because hedge funds are in a slump, their performance having been easily bested by Bogleian passively invested index funds. As has been the case so many times before, Son may see something the rest of us are missing.