NEW YORK — Despite a rough year for SoftBank Group and its investment arm Vision Fund, one Wall Street titan does not hesitate to praise the Japanese conglomerate’s leader, Masayoshi Son.
“I’m a big believer in Masa Son,” Larry Fink, the founder, chairman and CEO of BlackRock said in an interview with Nikkei. Calling Son “one of the most brilliant investors in the world,” Fink said, “Most people in my lifetime… the majority have not done anything close to what Masa Son has done.”
That would hold true for Son’s famous $20 million investment in Alibaba Group Holding two decades ago, which ballooned to $130 billion over time. But it sounds less convincing after the failed initial public offering of office-sharing company WeWork, followed by a recent string of layoffs at SoftBank portfolio companies such as Indian hotel chain Oyo, American robotic pizza making company Zume Pizza, and San Francisco-based logistic startup Flexport.
But Fink compared it to baseball, where a batter who only hit once every three times in the box would be considered a great player.
“In the world of investing, you’re required to be over 50%,” in terms of batting average, Fink said. “That’s hard by itself. But if you look at the success of Masa Son over his 30 years of existence, I would say he’s been in an incredible investor. … But that doesn’t mean he’s 100% right.”
Fink welcomed the recent number of failed IPOs, calling it a reset of a bubble. “Private growth equity valuations were too inflated,” he said. “And now it’s being reset. This is fantastic. It wasn’t systemically risk… It didn’t blow up the world, it blew up a few companies.”
He said some companies with growth and earnings will survive but those with only “fantasies,” will not.
“A lot of people look to what Amazon did. In the early years, they didn’t make much money, but they didn’t lose money. Some of these companies that are going public are losing a billion dollars a year or a billion dollars a quarter.”
He took issues with many young companies calling themselves “tech” startups when there is little technical secrets behind their business models.
“There was a misuse of the word technology, and everybody bought into it,” Fink said. “What’s so technology about food delivery? What’s so technological about driving a cab?”
Meanwhile, BlackRock, the world’s largest asset manager, sees “great opportunities” in China. Despite rising wages in the country, which would weaken its advantage as a low-cost base for manufacturing, Fink said he was “very bullish in China.”
“China needs to focus on their retirement market in a very big way. It’s one of the most rapidly aging societies in the world, and retirement has not been a focus.”
Fink praised Alibaba’s online payment platform Ant Financial, calling it a “brilliant idea” to bring the unbanked population of China onto a payment platform.
“Ant Financial created a mechanism that people could store their money there to buy things on Alibaba. They created that product to create more velocity of purchases.”
Citing that technology will be a crucial engine of growth, Fink said that BlackRock has been in talks with China’s Tencent Holdings and other companies to explore collaboration.
This interview was conducted before the coronavirus outbreak