Trouble at the top of SoftBank may threaten its pricey investments

A tense relationship between COO Marcelo Claure and Vision Fund head Rajeev Misra is causing disruption at the megafund

Feb.February 08, 2019 09:00 AM

Rajeev Misra and Marcelo Claure (Credit: Getty Images and iStock)

It’s not easy to share the crown.

Strained personal relations between Marcelo Claure, SoftBank’s chief operating officer, and Rajeev Misra, who handles SoftBank’s $100 billion Vision Fund, are impacting business, according to Bloomberg.

Claure became COO in May, and was tasked with fostering collaboration between SoftBank’s different portfolio companies, which include the We Company, Uber, and other startups. But problems have emerged between Claure and Misra, who manages the Vision Fund, sources told Bloomberg.

On February 1, 40 employees hired to work under Claure to improve operations were informed they now worked for Misra at the Vision Fund. It was the latest power play between the two executives, who have been at odds for months. The move reduces Claure’s mandate, although he still oversees the We Company, ARM Holdings and Fortress Investment Group.

This came after months of disagreement between the two executives. Masayoshi Son, the Japanese billionaire behind SoftBank, tried to ensure that Claure had a company-wide mandate after his appointment in May 2018.

But he ran into a roadblock with the Vision Fund, because major changes in its operations have to be approved by the fund’s Saudi limited partners. They wanted Claure’s team to be part of the Vision Fund for compliance reasons, according to Bloomberg. Claure declined to move his team to the Vision Fund, which would have meant working under Misra.

Continuing conflict between the men could affect businesses in their portfolios. For example, SoftBank has invested more than $10 billion in The We Company, but that is split between SoftBank, where Claure holds more power, and the Vision Fund, where Misra is in charge.

The We Company suffered a blow last month, when Softbank’s potential investment of $16 billion was slashed $2 billion after backers, including sovereign wealth funds in Saudi Arabia and Abu Dhabi, got cold feet. The flexible office space company has yet to turn a profit.

In a joint interview with Bloomberg, the Misra and Claure said they are working together.

“Our shared passion for our work should not be misread as tension,” Claure told Bloomberg, “We will continue to collaborate – as we do everyday – on executing and realizing SoftBank’s bold mission for the future. The changes were made because they were the right thing to do for our business.”

Son has said he aims to raise a new $100 billion fund every two or three years. But his dream of seeing start-ups collaborate, rather than compete, might be in jeopardy if his top executives cannot work together.

Son’s $5.46 billion share buyback and strong fourth-quarter results gave SoftBank a $17 billion valuation boost on Thursday.  [Bloomberg] – Decca Muldowney

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