Mubadala expected to invest in Vision Fund 2 in Q4: Sources

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Abu Dhabi state fund Mubadala Investment Company is expected to invest in Japanese group SoftBank's Vision Fund 2 in the fourth quarter of 2019, which will focus on technology projects, two sources familiar with the matter told Reuters.

In 2017, political and economic allies United Arab Emirates and Saudi Arabia contributed nearly two-thirds to SoftBank's technology and innovation focused $100 billion Vision Fund 1 through their sovereign wealth funds.

Mubadala committed $15 billion while Saudi Arabia's Public Investment Fund (PIF) committed $45 billion.

The Japanese telecom and investment group announced Vision Fund 2 in July, and has already secured pledges for it totaling about $108 billion.

Its founder and Chief Executive Masayoshi Son said last month that the anchor investors from the first fund, Saudi Arabia and Abu Dhabi, were showing “high interest” in taking stakes and negotiations were continuing.

“Talks have been ongoing, the exact investment will be finalized in the next quarter when a commitment could be made,” a source aware of the matter told Reuters.

Discussions on the investment are directly between Mubadala and SoftBank, and Mubadala's decision is independent from the potential participation of Saudi Arabia's PIF, the sources said.

“Talks are continuing (between Mubadala and SoftBank) and we continue to assess the investment,” Brian Lott, spokesman for Mubadala said, declining to go into details.

A spokesman for SoftBank declined to comment while PIF did not respond to a request for comment.

Mubadala, with assets under management of $229 billion, is an investor in pioneering technology firms including AMD, Global Foundries and others. It opened an office in San Francisco in 2017 with a dedicated team and has made several investments in Silicon Valley as part of a partnership with SoftBank Group.

Abu Dhabi, capital of the United Arab Emirates, is betting big on technology and innovation that are central to the emirate's economic diversification strategy.

SoftBank has provided half the firepower for a $400 million Mubadala fund to back European tech startups, according to a person familiar with the situation.

SoftBank intends to put in $38 billion of its own money into Vision Fund 2 and has memoranda of understanding with other investors including Apple, Taiwanese telecom hardware maker Foxconn Technology and Microsoft.

Some Japanese banks and others count among contributors to the fund.