Given SoftBank’s stated mission as a '“strategic investment company for the growth of technology, especially around AI," Gerry Lopez was always a curious choice as the man overseeing the companies the Vision Fund invested in.
Lopez, who arrived at SoftBank less than a year ago in December 2018, had no previous experience working with technology companies. Best known for a six-year sojourn at AMC Entertainment during which he masterminded fully-reclining arm chairs as a means of luring movie-goers into cinemas, he came from Realty Income Corporation, a real estate investment trust, after four years as a director of real estate investment firm CBRE. It's a background that doesn't seem suited to SoftBank's array of tech investments but would seem to recommended him as a man to keep a handle on WeWork, the property rental company into which SoftBank has invested $10.5bn, and which is now seeking a $5bn rescue package after its failed IPO.
In an article published in the Financial Times in August, back when WeWork was still entertaining a $47bn IPO, Lopez was still flying high and talking of SoftBank's belief in entrepreneurial "freedom" and hands-off approach. The FT said Lopez’ role as operating partner was to manage a group of 30+ executives dispersed by SoftBank to help nudge its "ecosystem" of portfolio companies into a virtuous cycle of growth and international expansion.
It was all very liberal: “This is not PE, so we can't command like that,” said Lopez of his power to compel portfolio companies to help each other out. “This is companies working together because we make the right introduction to the right person at the right level in the company to his or her counterpart in another company.” Lopez was the grey-beard tech-whisperer in the middle of a mass of mostly younger entrepreneurs.
Needless to say, it seems that Lopez was not nearly commanding enough. The lavish lifestyle of WeWork founder and now-ex-CEO Adam Neumann suggests the 40-year-old entrepreneur could have benefitted from a far firmer hand from 60-year-old Lopez and his team of 30. Now that Neumann has gone and WeWork has a new CEO in the form of Kazuyuki Sasaki, Lopez and his team may want to be a little more vigilant. They may also want to hire some people to help them - in August, Lopez said he was hiring another 40 people to his team before the end of this year. As with all operating roles on the buy-side, the recruitment will likely be of people with industry experience, rather than a background in banking. This time, Lopez might want to choose people with a rather more stern approach.
The ex-Goldman partner in the wings
SoftBank already has its share of bankers anyway. As we've noted before, it's rehoused plenty of senior traders from Deutsche's glory days. It also transpires that SoftBank has recruited a former partner from Goldman Sachs.
Goldman said this week that it lost $80m on WeWork. This was far less than the $264m expected by some analysts and reflects Goldman's quiet reappraisal of WeWork's real value earlier this year. Even so, Mark Agne, Goldman's former co-head of APAC equities trading and head of Japanese securities, seems to have bought into SoftBank's vision for the Vision Fund. Agne, who left Goldman in 2016, arrived at SoftBank as London managing partner in June 2019 according to his LinkedIn profile.
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