ICG and Nomura hold first close on Japanese fund

The mezzanine joint venture has reached ¥28 billion.

Nomura ICG has held a first close on Japanese mezzanine fund NICG Investment Business on ¥28 billion (€190 million; $234 million), the firms said in a joint statement.

The 50:50 partnership between the Tokyo-based investment bank Nomura Holdings and London-based investment manager Intermediate Capital Group raised funds from 15 investors. It intends to hold a final close in 2015.

The fund has reached the first close one year after launching in November 2013. It has also committed around ¥10 billion in two transactions.

Tomohiro Kikuta, representing director of Nomura ICG, commented: “The successful first close of Nomura ICG’s Japan mezzanine fund shows that there is real appetite from institutional investors for this type of portfolio diversification and exposure to this level of credit investing. The Fund is currently deploying capital on target.”

Both Nomura and ICG have allocated ¥10 billion to the venture as initial seed capital. Hong Kong-based ICG managing director Chris Heine explained to PDI in November last year that the mezzanine market represented an opportunity for Japanese investors in particular to achieve higher yield. “They are willing to accept lower returns if they get yield and lower risk,” Heine said.

Christophe Evain, chief executive of ICG, added in a statement: “We believe that Japan continues to offer investors a wealth of opportunities and ICG is committed to support Nomura ICG in developing the mezzanine market in Japan.”

Kentaro Okuda, global head of investment banking at Nomura, said: “Nomura and ICG will meet the demand of investors for middle risk, middle return credit investment and the financing requirements of sponsors and companies through Nomura ICG.”