The problem is risk vs upside. If you make a 3.5 billion dollar bet for less than 100% and it became the largest company on eart that's not a huge ROI.
Lot's of smaller but good investments vs a lower quality bad investment.
The best option for sovereign wealth funds is probably buying the widest possible swath of companies that reach some basic criteria. I suspect they do massive deals because internal politics means being in charge of such a deal let's you gain more power even if it costs the country on average because a huge win on a 3.5 billion investment means little at that scale.
Splitting up money into a bunch of smaller investments significantly decreases your chance of an outsized return and increases your chance for achieving the mean return for that asset class.
A sovereign wealth fund already faces this problem as 3.5 billion is peanuts (aka under 1%) to them. Now if they could get a 10x return in one year that would be something, but a tiny odds for a 10x return in a decade is not worth the significant risks involved in such a terrible investment.
You might be correct that Uber turns out to be a terrible investment. But there are a lot of smart people out there that disagree with you. And, unlike you, a lot of them have gotten to look at the details of Uber's financials.
I share your skepticism, but I'm not super confident in that belief.
If Uber can stay afloat until we have full adoption of self-driving cars, they will profit big-time. They will have a fleet of cars at almost no cost to them as car owners get in line to sign up to rent out their car during "off" periods.
That's the bit I wondered about. If they are losing 120 to 800 million per quarter, are there enough investors willing to wait through those losses for X years? I've heard wildly varying estimates for the value of X.
Another way of looking at this is they want to invest 0.5% of the worlds capital you can't get above 'market' rates for very long. And the longer you do, the harder this becomes. However, you can easily get below market rates.
