SoftBank’s Rajeev Misra to launch $6bn fund backed by Abu Dhabi groups

Rajeev Misra, the trader who helped transform SoftBank into the world’s biggest and most controversial technology investor, is stepping back from the Japanese group to launch a new $6bn fund backed by Abu Dhabi.

Misra, who structured and ran the record-breaking $100bn Vision Fund, said he would remain involved with SoftBank but that his new venture would pursue investment strategies beyond start-ups.

The shake-up marks the latest sign of unrest inside SoftBank, which has been roiled by plunging valuations for technology companies as well as an exodus of senior leadership over the past several months.

The new fund would be backed by Abu Dhabi state funds Mubadala and ADQ, as well as Royal Group, the conglomerate chaired by Sheikh Tahnoon bin Zayed al Nahyan, the United Arab Emirates’ national security adviser, said Misra.

The support from Abu Dhabi shows how Misra has succeeded in retaining the backing of investors in the region, despite the underwhelming performance of the Vision Fund, which is best known for disastrous bets on office provider WeWork, China’s Didi Chuxing and failed supply chain finance group Greensill Capital.

“We have built a strong relationship with Rajeev and will explore investing in his new fund,” said Mubadala, which was the $100bn Vision Fund’s second-biggest external investor after Saudi Arabia’s sovereign wealth fund.

Sheikh Tahnoon, who is a brother of the UAE president Sheikh Mohammed bin Zayed, is also the chair of ADQ, one of Abu Dhabi’s newest and most active investment vehicles.

Misra had spent increasing amounts of time in recent years with Sheikh Tahnoon, one of the UAE’s most powerful figures who also oversees a sprawling business empire, people with knowledge of the matter said. ADQ declined to comment. Royal Group did not immediately respond to a request for comment.

SoftBank founder Masayoshi Son told staff in a memo on Thursday that Misra, a former Deutsche Bank and UBS executive who joined SoftBank in 2014, would leave key roles at the company.

Son said he would personally take on more day-to-day management of SoftBank’s second Vision Fund, which failed to attract external backing and has made troubled bets on start-ups such as Sweden’s Klarna.

Son added that Rajeev would continue to oversee the $100bn Vision Fund and would remain “a trusted senior adviser and integral part of the SoftBank family”.

During his eight years at SoftBank, Misra clashed repeatedly with senior colleagues including former Google executive Nikesh Arora, who departed in 2016, and former Sprint chief executive Marcelo Claure, who left earlier this year.

Several SoftBank executives, who like Misra previously worked at Deutsche Bank, are in discussions to join Misra’s new venture, according to people familiar with the matter, including Munish Varma, Yanni Pipilis and Akshay Naheta.

Naheta, another divisive figure within SoftBank, presided over the group’s shortlived internal hedge fund SB Northstar, which was effectively shut earlier this year after running up $5.75bn in losses. The 40-year-old left SoftBank in April and is based in Abu Dhabi where the new fund’s principal backers are based.

At SoftBank, Naheta developed a reputation for engineering controversial trades involving derivatives, such as SoftBank’s intricate $1bn bet on the shares of fraudulent payment company Wirecard.