Saudi-backed fund in talks with Fintech firm OakNorth

Simon Austin's picture
by Simon Austin

The Saudi-backed Softbank Vision Fund‎ has been holding discussions for several months about investing hundreds of millions of dollars into the Fintech firm OakNorth, according to reports.

OakNorth is a lender to small businesses and has an office in the Alexandra Buildings on Queen Street in Manchester. According to Sky News, negotiations between the $92bn (£70.6bn) Vision Fund‎ and Oaknorth are "progressing".

The Saudis are the biggest investor in the Vision Fund, which was set up by the Japanese businessman Masayoshi Son as a vehicle for backing tech start-ups.

The Vision Fund's talks with OakNorth are said to have been taking place since the summer and a number of options are said to have been discussed, including subscribing for $500m (£384m) of new shares as well as acquiring shares from other investors worth a similar sum.

According to reports in India, Indiabulls Housing Finance plans to sell all or part of its 18.7% stake in OakNorth Holdings within a month to an unnamed private equity fund (believed to be Softbank), which is looking to invest in fresh and existing shares equivalent to a 30% stake in OakNorth Holdings, a lender to small businesses.

“Indiabulls is looking to sell stake in the UK-based mortgage lender OakNorth to a large private equity fund,” a source told the Economic Times. “The deal is likely to close within a month. The enterprise value of OakNorth is over $2.5 billion to $2.9 billion as per this transaction.

“Indiabulls has met with potential investors including Softbank’s Vision Fund. SoftBank is looking to subscribe to new shares as well as buy stake from Indiabulls Housing Finance.”

If concluded, the acquisition would represent the first UK company deal involving the Saudi Public Investment Fund‎ since the murder of journalist Jamal Khashoggi. OakNorth was set up by Rishi Khosla (above) with an old university friend, Joel Perlman, after the pair had previously having launched Copal Amba, an outsource research business for investment banks.

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