Japanese brokerage firm Nomura Holdings Inc. and the United Kingdom's Intermediate Capital Group Plc (ICG) agreed to enter into a joint venture to provide mezzanine debt. The said the debt fund will be used for acquisition purposes.
In a joint statement, Nomura and ICG said that they will create a new company and each firm will inject JPY10 billion (USD100 million) into the fund.
According to Reuters, mezzanine debt is commonly utilized by private equity firms that use leverage for acquisitions. It comes between senior debt and equities. Mezzanine debt providers thus get higher yields than senior debt providers.
The report said that the new entity will also seek financing from institutional investors.
Based on its latest financial report, Nomura has a total of JPY24.7 trillion assets under management. British ICG, on the other hand, had EUR8 billion assets under management as of 2010.
Any future funds created as a result of the agreement will be jointly seeded, distributed and co-managed between Nomura and ICG, Reuters said.
Join the Conversation