Akshay Naheta: Former German trader who SoftBank bets on THG

British billionaire and founder of e-commerce group THG, Matthew Moulding (Matthew Moulding) made it clear who is in charge of SoftBank.

“Anyone who knows Softbank will know Massa [founder Masayoshi Son] Have the final decision right. “Shortly after Manchester-based THG announced a US$730 million investment from the Japanese group, Mulding told reporters.

The investment is one of a series of transactions disclosed by THG and SoftBank after the London stock market closed on Monday. Softbank invested 730 million U.S. dollars, making it a cornerstone investor for THG to raise 1 billion U.S. dollars. In September last year, the capital was publicly unveiled in London.

This also marks the first time that SoftBank (SoftBank) has set foot in a London-listed company. This huge Japanese investment group has become one of the world’s most powerful technology investors in recent years.It is titled “NASDAQ Whale” Last year, because of its excessive bets on a few high-profile technology stocks.

Although SoftBank’s billionaire founder Sun Zhengyi has approved the investment, Modin said he had negotiated with Akshay Naheta and his team.Nahta Run SB Polaris, Sun Zhengyi established a department of SoftBank last year to manage its investment in public stocks.

An insider said that the introduction between THG and SoftBank came through Goldman Sachs.

Naheta, headquartered in Abu Dhabi, is the architect of some of SoftBank’s most complex and controversial transactions, including Nasdaq Whales, and transactions related to the now declining German payment company Line card.

The 39-year-old former Deutsche Bank trader has expertise in structuring derivatives-centric transactions. As the London stock market opened on Tuesday, it was not a $730 million investment that attracted investors.

Rather, this is an agreement between the two parties THG and SoftBank This allows the Japanese group to choose but not be obliged to purchase 19.9% ​​of the shares of a subsidiary of British e-commerce company THG Ingenuity.

THG Ingenuity provides e-commerce and logistics services to third parties and is regarded by analysts as one of the most attractive departments of the British group, especially as more and more consumers shop online. However, last year’s sales were only 137 million pounds.

According to the terms of this unconventional transaction, SoftBank will have to spend US$1.6 billion to acquire shares in THG Ingenuity, a price that would value the department at approximately US$6 billion.

The dizzying multiple multiples associated with Ingenuity made THG stock price up 13%. Ingenuity’s customers include Nestlé and British DIY retailer Homebase. They gave up some of these gains early Wednesday and traded at 639 pence, bringing the market value of THG to £6.2 billion.

Liberum analyst Wayne Brown said that the Ingenuity deal not only emphasizes that “THG is discounting heavily, but it also leaves huge room for upside, especially when people consider the commercial benefits that can be obtained with SoftBank’s investment portfolio.”

Not everyone is ecstatic. Clive Black of Shore Capital said that the lack of details about the option and the circumstances under which it can be exercised meant that there was a “smoke and mirror” element in the transaction.

Moulding told analysts that this transaction is an option because THG Ingenuity is not currently a separate entity tied to other parts of the company. However, he admitted that SoftBank may inject $1.6 billion in capital, the company has no specific purpose, which will dwarf Ingenuity’s recent capital expenditure of approximately $100 million per year.

There is no doubt that the option arrangement Help SoftBank get immediate results The company made a US$730 million investment at a price of 596 pence per share, and on this day, THG’s stock price may fall because existing shareholders are diluted by a US$1 billion equity offering.

SoftBank and Naheta declined to comment.

Although THG’s stock was renamed The Hut Group at the time of its listing, it still easily exceeded its IPO price of 500 pence, but it fell 25% from its historical high of nearly £8 in January.

Naheta is no stranger to London’s capital markets. He was recruited in 2017 by Rajeev Misra, a former colleague of Deutsche Bank, and he holds a position at SoftBank Investment Advisers. SoftBank Investment Advisors is located in London and manages the group’s $100 billion Vision Fund.

Naheta, sandwiched between Deutsche Bank and SoftBank, spent five years in London managing his own hedge fund called Knight Assets. In 2015, the company acquired an aggressive stake in the New York-listed Bollywood film producer Eros International, when the company regarded Misra as a member of its board of directors.

His work at SBIA is arguably the most famous because he made a bet on Wirecard in 2019. The transaction helped to increase confidence in the payment group, which was then committed to fraud by Germany’s largest company last summer. It went bankrupt.

Although the transaction ran out of SBIA, it was later revealed that instead of SoftBank’s initial investment, the transaction was fully funded by Abu Dhabi’s sovereign wealth fund Mubadala and a small number of SoftBank executives including Misra and Naheta.

Naheta left SBIA last year and took an executive role at SoftBank itself, managing a new internal hedge fund called SB Northstar. When the Financial Times called it the Nasdaq Whale, this fund was once the most watched fund on Wall Street. The Nasdaq Whale has used excess option bets to promote the respite of stocks such as Facebook and Amazon.

These transactions were ultimately unprofitable, but Northstar Booking huge losses Later that year, he finally withdrew from them. SoftBank said on Wednesday that SB Northstar announced a loss of $300 million in derivatives in the first quarter of this year, a total loss of $5.6 billion since July.

However, due to his growing influence within the company and his emergence from the shadow of Misra, Naheta also played an important role, as SoftBank has grown from a company that it owns. The group of investment groups is transformed into a group.

A person familiar with the matter said that despite the high-tech transactions, “Akshay’s stock has risen a lot”, adding that he often talks to Son.

Since then, SB Northstar itself has been committed to buying newly issued shares of listed companies, such as the acquisition of shares in Norwegian education software company Kahoot in October last year.

Naheta has previously been involved in the business of British companies.He played a key role in structure Sale of Arm Holdings, British chip designer SoftBank acquired US-based Nvidia in 2016.

But the deal with THG was touted by some as a rare e-commerce success in the UK, which means that he will be closely watching his first major move into the London market.