A small number of banks profited from a SoftBank dealmaking bonanza in 2018 — one of the most lucrative fee opportunities in modern history

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Masayoshi Son SoftBank

SoftBank spent $900 million in investment banking fees in 2018, more than any company in at least a decade.
The People’s Republic of China is the only entity to outspend the Japanese tech conglomerate.
SoftBank has primarily paid fees to investment bankers to raise capital, but it also executed many high profile investments in companies like WeWork and Cruise Automation.

If you didn’t have SoftBank as an investment banking client in 2018, you missed out on one of the most massive and lucrative fee opportunities in modern history.

The Japanese tech conglomerate run by billionaire Masayoshi Son spent a staggering $894 million on investment banking fees in 2018, according to financial data company Refinitiv, securing financial advice on deals and procuring an array of bonds, loans, and equity investments.

That’s not just the highest total for any company last year, but the highest in at least the past decade.

The next-highest fee payer in 2018, German pharmaceutical giant Bayer, is leagues behind at $384 million — 57% less than SoftBank.

No corporation has come close to SoftBank’s 2018 tally in recent years. The last time a company spent over $800 million in a year on investment banking fees was in 2009, according to Refinitiv, when Citigroup spent $813 million as it was restructuring its business following the financial crisis.

To find a real competitor for Son’s appetite for investment banking in recent years, you need to include government nations. The People’s Republic of China has been the top spender in the world on such fees each of the past four years, according to Refinitiv’s data. China spent nearly $1.3 billion on fees in 2018, down from $1.5 billion in 2017.

What’s Son getting for that $900 million? Most of those fees stem from raising money — paying banks to underwrite debt and equity financing.

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Mergers and acquisitions comprises a much smaller piece of the pie, according to Refinitiv, but SoftBank was nonetheless exceptionally busy deploying the nearly $100 billion in its Vision Fund to make investments and acquisitions.

SoftBank’s 2018 investments include a $2 billion infusion in WeWork, $3 billion for Alibaba’s food delivery service, $2.3 billion for GM’s self-driving unit Cruise Automation, and $2 billion for Coupang, a South Korean ecommerce company.

The top beneficiaries of SoftBank’s investment binge last year are Japanese …read more

Source:: Business Insider

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