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(Bloomberg) -- SoftBank Group Corp.’s Shu Nyatta and Paulo Passoni, two of the three managing partners at the SoftBank Group Corp.’s Latin America Fund, said they are leaving to start their own venture business focused on late-stage startups in the region.
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This week, SoftBank is set to promote the LatAm fund’s third managing partner, Alex Szapiro, who currently holds an operating role, to a more senior position, a person familiar with the matter said. Juan Franck, a fund investor in Mexico City, will also get promoted, the person said. The firm is also weighing investing a substantial further sum in the fund, perhaps as much as $2 billion, the person said.
Still, the departures leave the fund in a challenging place. Latin American investments have proven a bright spot in SoftBank’s overall portfolio and the company will need to work hard to hold the confidence of late-stage startup entrepreneurs, who had held the firm in high regard.
The departures come three months after SoftBank chief operating officer Marcelo Claure left the firm following clashes with founder Masayoshi Son over compensation and responsibilities. Claure created and oversaw the LatAm fund, among other duties, and had advocated for its spinoff.“We’re firmly committed to playing a leadership role in Latin America," said Rajeev Misra, the London-based chief executive officer of the Vision Fund. "There is tremendous opportunity and I’m confident our teams across the region are well placed to help us back the next generation of extraordinary entrepreneurs.”Due in part to Claure’s advocacy, the fund had operated with considerable autonomy since launching in 2019, particularly compared to the much larger Vision Fund, based in London. Partners in that group must run investments by Son, whereas partners in the LatAm fund have the latitude to make their own decisions without vetting by other parts of SoftBank.The LatAm Fund also had a different compensation structure compared to the Vision Fund. The LatAm Fund's compensation was more in line with other growth-equity funds, where compensation for each managing partner might be around 15% or 20% of the pool of profits divided among the investing team. That changed after Claure left, Passoni said, when a new compensation structure was announced with no binding commitments around the share of the profits.