Japan’s Daiwa targets 50% jump in M&A advisory with US focus

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TOKYO (Reuters) – Japan’s Daiwa Securities Group Inc aims to boost annual revenue from the M&A advisory business by 50% in eight years by hiring more bankers and acquiring boutique firms to try to expand its presence in the United States.

The second-largest Japanese brokerage and investment bank is targeting global M&A (merger-and-acquisition) revenue of at least 70 billion yen ($518.33 million) in the year ending March 2031, compared to 46.7 billion yen for the financial year just ended, it said on Wednesday.

“The M&A business is where we can expect big growth without using much of our assets,” Chief Executive Seiji Nakata told a strategy briefing on Wednesday.

“We plan to allocate our resources vigorously to expand mainly in the United States, potentially buying boutique M&A firms,” he said, citing infrastructure, industrials, consumers and health care as sectors of focus.

Daiwa said it expected to increase the number of M&A bankers it employs over the next eight years to 900 from 650.

Its focus has been on M&A advisory for mid-cap deals worth between 50 billion yen and 100 billion yen, a segment relatively sheltered from inflation-driven market turbulence.

Among Japanese firms, Mizuho Financial Group Inc said this month it would buy U.S. M&A advisory firm Greenhill (NYSE:GHL) & Co Inc for $550 million, including debt, as it pursues a bigger share of the world’s largest investment-banking fee pool.

($1 = 135.0500 yen)