SMBC Nikko Securities is considering starting a fund to provide what is known as mezzanine financing, as a mergers and acquisitions boom in Japan fuels demand for loans that are riskier than senior debt.<\/p>\n
The Tokyo-based brokerage, a subsidiary of Sumitomo Mitsui Financial Group, is planning to work with One Investment Management (OneIM) as a partner, people familiar with the matter said. The fund is seeking to raise around \u00a5100 billion ($627 million), primarily from institutional investors outside of Japan such as pensions and sovereign wealth funds, said the people, asking not to be identified discussing confidential information.<\/p>\n
It will invest in subordinated loans and preferred shares for acquisition deals involving Japanese companies, they said. OneIM is an alternative investment manager started by Rajeev Misra, who helped transform SoftBank Group into one of the world\u2019s biggest technology investors.<\/p>\n
Japan\u2019s push to improve corporate governance has triggered a jump in M&As, including taking companies private. Mezzanine financing is between senior debt and equity in terms of risk, offering potential extra returns for investors.<\/p>\n
Spokespeople for SMBC Nikko and OneIM declined to comment.<\/p>\n
The fund aims to quickly help finance big acquisitions totaling \u00a5100 billion to \u00a5300 billion, the people said.<\/p>\n
Banks\u2019 ability to increase loans is constrained by the expansion of their balance sheets stemming from active fundraising in the market, at a time when Basel III international banking regulations pressure lenders to reduce risky investments.<\/p>\n
SMBC Nikko\u2019s fund is searching for anchor investors who could park big amounts of cash in future projects, and will begin investing once it has a set amount of funding, said the people, adding that the firm expects \u00a5100 billion to be reached later this year at the earliest.<\/p>\n","protected":false},"excerpt":{"rendered":"SMBC Nikko Securities is considering starting a fund to provide what is known as mezzanine financing, as a…\n","protected":false},"author":2,"featured_media":33587,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[3333,25528,359,8,17,1173,25529],"class_list":["post-33586","post","type-post","status-publish","format-standard","has-post-thumbnail","category-japan","tag-acquisitions","tag-brokerages","tag-investments","tag-japan","tag-japanese","tag-mergers","tag-smbc-nikko"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts\/33586","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/comments?post=33586"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/posts\/33586\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/media\/33587"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/media?parent=33586"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/categories?post=33586"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/japan\/wp-json\/wp\/v2\/tags?post=33586"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}