$100 billion tech fund to be UK based
A new $100 billion tech fund, described as one of the biggest funds of its kind in the world, is to be based in London.
SoftBank, with help from Saudi Arabia, which is chipping in with $45 billion, has revealed its SoftBank Vision Fund – armed with no less than $100 billion to invest in tech firms.
Masayoshi Son, Chairman & CEO of the Japanese company said: “Over the next decade, the SoftBank Vision Fund will be the biggest investor in the technology sector.”
He also said that the fund “will further accelerate the information revolution by contributing to its development.”
Although the fund will make investments around the world, it will be based in the UK.
There are some interesting aspects to this announcement.
In part, this is a result of rock-bottom interest rates. The world’s biggest investors are being forced to try new ideas to generate returns. In a way, this was the object of the policies pursued by central banks. For decades, investors have been too risk averse – choosing property and government bonds over riskier, but wealth-creating projects. But interest rates are now so low, that such policies are at least being re-considered. Desperation may have at last forced investors to reconsider this strategy.
Technology and or innovation is how the global economy can throw off the malaise that has haunted it for too long, and enter a brave new world that may yet see a phase of wealth creation that dwarfs anything seen in the past.
The fact that the fund is to be based in the UK – London – is fantastic news for the UK plc. And comes as a shot in the arm. After-all, the technology sector is especially likely to be adversely affected by Brexit.
Among the many benefits to the UK, the positioning of the fund will help attract talent, expertise in technology investing into the UK, and with that, a host of support services will emerge.
Maybe the UK’s main technology hubs can yet rival Silicon Valley for leading technological innovation – but the UK’s Achilles heel has long been lack of investment expertise in this one area. It is one of the great ironies of the UK economy. The country boasts an incredibly sophisticated banking sector, and has long been home to some of the world’s most exciting technological advances. But while the City and the UK’s technology/entrepreneurial sector are geographically close, and in the case of the technology clusters around Shoreditch, just feet away from the money making machines of London – culturally they have been poles apart.
Maybe, the foundation of the SoftBank Vision Fund will change that – if this is right, then there is cause for celebration.