Why Softbank Bought Fortress Investment Group
Softbank is a well known Japanese internet and telecommunication giant that as of recent has a hand in many different areas including e-commerce, finance, broadband, and marketing to name a few. As of 2017, they have switched up their game by purchasing a well known New York-based global investment manager. Why does this make sense for a company like Softbank that typically operates in the technology space, and what do they hope to accomplish?
Founded in 1998, Fortress manages assets for more than 1,750 institutional clients and private investors worldwide across credit, real estate, permanent capital and private equity investments. They bring to the table nearly 20 years experience that combined had led the company to manage $36.1 billion in assets as of September of 2017. In addition to their assets, they had 953 asset management employees, including 216 investment professionals at their New York-based headquarters as of December 2017. This easily translates into Fortress being an expert in their field of operations and a lucrative asset for anyone who has a stake in them.
Softbank, on the other hand, started in 1981 as a telecommunications company and since then has grown to become a big player themselves in the internet and technology space. They hold stakes in companies like Sprint, Yahoo Japan, Uber, and Nvidia to name a few. In 2016, they even went as far as to purchase UK-based chip manufacturer ARM for an insane £24 billion. And contact them, They did this with the goal to continue development on the Internet of Things. Later, they took that a step further and bought two robotics companies from Alphabet (i.e. Google) to further expand their portfolio. The point being, Softbank is technology first, so why were they interested in a business like Fortress that for the most part isn’t cut from the same cloth?
The answer is in the details
Masayoshi Son, CEO, and chairman of Softbank has made it clear that they wish to explore a variety of new areas. As part of a seemingly visionary strategy where the purchase of Fortress gives them access to world-class experts in financial management. They are virtually becoming a powerhouse in investment overnight with this purchase. Furthermore, with this in mind, it starts to make a lot of sense. What’s more interesting is that Fortress would function as a subsidiary under Softbank’s ever-growing umbrella. Their current management would stay at the helm of the firm and Fortress is allowed to function in much the same way as it has since 1998. This bodes well for everyone involved including new job seekers, Fortress current list of investment managers and Japan’s future growth economically, and https://www.wsj.com/articles/softbank-nears-deal-to-buy-fortress-investment-group-for-more-than-3-billion-1487112978.
With the purchase of Fortress, Softbank is allowed to grow even more in the future to come. This is great for all the players involved and will only aid in Masayoshi Son’s ambitions for the company. Moreover, this is great for investors across the board as technology continues to play an important role for Softbank and it’s hard to argue with that, and more information click here.