[Asia Economy Reporter Yujin Cho] SoftBank Group Chairman Masayoshi Son, who will step down from frontline management in April, is planning new investments in the biotechnology and healthcare sectors, Bloomberg reported on the 23rd (local time).
According to the report, SB Northstar, led by Chairman Son, is planning to invest billions of dollars in publicly traded stocks related to biotechnology and healthcare. Citing anonymous internal sources, the news agency stated that SB Northstar plans to open a new front in its asset management strategy through investments in biotechnology and healthcare.
SB Northstar, an investment subsidiary in which Chairman Son holds a 33% personal stake, had cash assets of $22 billion as of the end of last year. It has aggressively invested in Nasdaq tech stocks and derivatives, including Amazon ($7.39 billion) and Facebook ($3.28 billion).
This plan comes as Chairman Son announced he would step down from frontline management in April. Earlier this month, during an earnings announcement, he expressed optimism by saying that SB Northstar's performance is "still in the testing phase" when asked about it.
This is not the first time Chairman Son has shown interest in the biotechnology and healthcare sectors. Last year, he opened the door to biotechnology investments by betting $312 million (about 6% stake) on Pacific Biosciences, a Nasdaq-listed DNA sequencing company. Recently, he increased his stake by betting an additional $900 million, about three times last year’s investment amount.
Pacific Biosciences’ stock price closed at $37.12 as of the previous day, soaring more than tenfold over the past eight months since late June last year ($3.5). According to The Wall Street Journal (WSJ), Chairman Son has invested in six IPOs of U.S. bio companies, including Pacific Biosciences. WSJ cited anonymous sources saying these investments are part of Chairman Son’s plan to build a biotechnology-related portfolio.
Biotechnology and healthcare experienced rapid growth last year, benefiting from the COVID-19 pandemic. According to Bloomberg’s industry classification, biotechnology was the second-largest sector for IPO size in the U.S. stock market last year, following SPACs, with a total IPO size of $16.1 billion for biotechnology-related companies. The Nasdaq Biotechnology Index posted a 37% annual return last year, more than double the S&P 500’s return.
Some speculate that this investment is closely related to Chairman Son’s remarks last year about “investing in preparation for emergencies.” He had said that an emergency could occur within three months due to COVID-19 and secured cash by selling assets worth about $80 billion in preparation.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
