SoftBank’s Rajeev Misra To Step Back To Launch New Fund

(Bloomberg) -- Rajeev Misra is stepping back from his main roles at SoftBank Group Corp., marking the exit of one of the key architects of the Japanese conglomerate's sometimes chaotic evolution into the world's largest technology investor. 

A key lieutenant of SoftBank's founder Masayoshi Son, Misra will retain a senior position with the group's first $100 billion Vision Fund, but relinquish other roles, people familiar with the matter said.  

Misra recently held talks with Son in Tokyo, during which he told his boss of his plans to leave to pursue his own venture, according to the people, who asked not to be identified discussing confidential information. 

He's already secured more than $6 billion in backing, including from Middle East investors, for a new fund that'll target a mix of strategies, the people said. Akshay Naheta, a former colleague of Misra, alongside SoftBank managing partners Yanni Pipilis and Munish Varma, have held discussions to join Misra's venture, some of the people said.

Deliberations are ongoing and no final decisions on the fund's size or the timing of its launch have been made, according to the people. Plans could also still falter, they said. A representative for SoftBank confirmed Misra's decision to step back. 

Misra will continue as CEO of the initial Vision Fund, and become vice chairman of SoftBank's wider investment arm, with Son taking over Misra's positions, according to an internal memo seen by Bloomberg. 

Misra's decision to step back at SoftBank will complete a hollowing out of the conglomerate's most senior investing ranks, which had been bolstered over the years by a raft of hires from bulge-bracket banks. 

The 60-year-old former Deutsche Bank AG executive made the Vision Fund one of the biggest champions of high-flying Silicon Valley startups before public stumbles and internal strife dimmed its star. The fund's attempts to regain its footing have been hampered by a drop in tech valuations, which resulted in a record loss for SoftBank in the quarter ended in March. 

After joining Deutsche Bank in 1997, Misra rose through the ranks to become a key deputy to then CEO Anshu Jain. After short spells at UBS Group AG and Fortress Investment Group, Misra landed at SoftBank in 2014. He'd already built a relationship with Son by helping him to finance difficult deals. 

The original Vision Fund would gather almost $100 billion, including $45 billion from Saudi Arabia's Public Investment Fund, as well as capital from Apple Inc., the government of Abu Dhabi and others. Under the aegis of Misra and other former Deutsche Bank executives, Vision Fund helped start the trend of investing massive amounts in startups -- which caused valuations to soar.

In its first year of investing, Vision Fund committed $65 billion to acquire big stakes in the likes of Uber Technologies Inc., WeWork, and Slack Technologies Inc. 

But bets began to sour. SoftBank's investment in WeWork collapsed, eventually leading the investor to bail out the remote working startup. A complex side-deal with Wirecard AG, which netted SoftBank executives a significant profit, led to criticism after the German payments firm also failed. 

While deploying a wave of capital at startups, Misra also clashed with senior rivals including former chief operating officer Marcelo Claure and president Nikesh Arora, ultimately outlasting them both.

(Updated with additional context in paragraphs four, six.)

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