SoftBank Investor Presentation Deck
Valuation Process / Methodology, and Definitions of Investment Performance
<Valuation Process>
SBIA is responsible for determining fair values on a quarterly basis in line with the requirements of the AIFM Directive (as issued by the FCA). The SBIA Valuation team is
functionally independent from portfolio management and may engage external specialists with a high level of knowledge and experience as needed, in determining the fair value of
certain complex financial instruments. In parallel, Investor Advisory Board of the Vision Fund has appointed certain external firms as independent valuers to perform semi-annual
independent valuation. Valuation results as determined by the SBIA Valuation team, with due consideration of the Independent Valuer's reports, are reviewed and approved by the
SBIA Valuation and Financial Risk Committee ("VFRC"). The VFRC comprises the SBIA CEO, CFO, CRO, General Counsel and senior Investment Professionals. Once approved
by the VFRC, valuation results are subject to a financial statement audit by the Vision Fund's independent auditors (Deloitte).
<Valuation Methodology>
The applicable reporting framework of the Vision Fund is IFRS (the "Standards"). Specifically, IFRS 13 (Fair Value Measurement) outlines the general framework for measuring fair
values. The Vision Fund is also compliant with the International Private Equity and Venture Capital (IPEV) valuation guidelines. In line with the Standards, the Vision Fund uses
valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs
(market share price, etc.) and minimising the use of unobservable inputs. For companies that are publicly listed in an active market, quoted prices are used without adjustment to
measure fair value. For companies that are privately held, the market and income approaches are widely used valuation techniques. The market approach includes the use of
Guideline Public Company multiples, industry valuation benchmarks and available market prices. The income approach, otherwise known as the Discounted Cash Flows method,
derives the value of a business by calculating the present value of expected future cash flows. The price of a recent transaction, if resulting from an orderly transaction, generally
represents fair value as of the transaction date. In applying the recent transaction method, we consider relevant factors including, but not limited to, the participation of new outside
investors, the level of sophistication of investors and the size of the investment round. Further, we recognize the senior-subordinate structure of the companies we invest in i.e.
senior shares are worth more than junior ranking shares.
<Definitions of Investment Performance>
Net Equity IRR means the internal rate of return of Class A Equity Interests after management fees, performance fees, Preferred Equity Coupon and other expenses. It is based on
the limited partners' equity cash outflows (capital contributions), inflows (distributions) and share of the subscription line of credit activities, net of investment-related financing, and
the Net Asset Value attributable to Class A Equity Interests as of March 31, 2019.
Net Blended IRR reflects the combined net performance of Class A Equity Interests and Class B Preferred Equity Interests and includes Preferred Equity Coupon distributions as
well as accrued Preferred Equity Coupon.
Net Equity IRR (SBG LP + Manager's performance Fee) is the same as Net Equity IRR computation but includes the addition of accrued performance fees for the Manager.
"Equity" IRRs are provided solely for illustrative purposes, as they reflect only a subset of the Vision Fund's overall performance, do not reflect the return on Preferred Equity
Commitments (which will have a material impact on the Vision Fund's performance in the aggregate, which could be significantly lower), and may not reflect the experience of any
limited partner. Results for individual limited partners will vary based on their specific investments as well as the timing of their specific cash flows.
The Vision Fund has a limited operating history and accordingly, performance information may not be representative and actual realized return on these unrealized investments
may differ materially from the performance information indicated herein. Vision Fund performance is based in part on valuations of certain investments that were collectively
acquired recently by the Vision Fund from SoftBank Group Corp.; accordingly, the performance information herein, which is based in part on valuations of unrealized investments, is
not indicative of future results. Such investments and the subsequent performance thereof had a positive impact on the performance of the Vision Fund. SoftBank Group Corp. is
under no obligation to collectively offer similar assets to the Vision Fund in the future.
Past performance is not indicative of future results.View entire presentation