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PACE OF TECH M&A TO CONTINUE

The authors of the content on this page from Sept 2012 to June 2017 are:
Market Commentaries: Gary Paulin, Ameet Patel, Paul Moran, Douglas Morton, Oliver Sherman, Ben Brownette, Rob Arnott, James Santo, Neil Campling
Research: Ameet Patel, Paul Moran, Douglas Morton, Oliver Sherman, Rob Arnott, Neil Campling

Much has been made of the creation of Softbank’s $100 billion technology fund. The fund itself has $25 billion committed from Softbank, $45 billion from Saudi Arabia’s sovereign wealth fund – the Public Investment Fund – $1 billion from Apple, and Softbank has announced investments from Foxconn, Qualcomm and Oracle’s Larry Ellison. The fund is on track to close at the end of this month (Source: DealStreetAsia.com). The fund Is expected to invest over a five year period and at an annual rate of $20 billion would be the equivalent of approximately a fifth of current global venture capital investment according to Reuters. But while the ‘Softbank Vision Fund’ was likely expected to be seeking investments in start ups it would appear that existing public and private technology companies will likely be the primary focus of investment. According to the well respected New York Times Dealbook 75% of the fund resources will be direct investments in private and public markets and will have no geographical constraints. The major bets will be on large companies and complemented by smaller venture investments in the areas of artificial intelligence, robotics and financial technology. With the fund not planning to pay back investors for 12-14 years the fund will be taking a long-term approach and seeking growth focused investments.

So we can now add the $100 billion Softbank Vision Fund to $120 billion China state backed funds aimed at technology M&A and strategic investments (see TMT year ahead section 12 for details). Certainly the pace of technology M&A isn’t slowing any time soon.