Capital Raising
Our strong domestic client base and global network enable us to provide corporate clients with high value-added financing solutions, as they look to raise capital for business expansion or as part of an overall finance strategy.
Loan-Related Business
The loan-related business, which we entered in 2005, includes originating and offering structured loans to regional financial institutions and providing non-recourse loans for real estate financing through our loan-related subsidiary, Nomura Capital Investment (NCI). Our track record in this area continues to grow. We believe the potential for LBOs and other loan-related business is considerable and intend to take advantage of these opportunities. We will expand NCI's functions to take a varied approach to real estate finance and corporate finance (leveraged finance).
Asset Finance Business
We are steadily building up results in the asset finance business in the United States through securitization activities related to CMBS (Commercial mortgage-backed securities: are securities issued with commercial real estate, such as hotels, shopping malls, and office buildings, as collateral.) and other types of securities. We will continue to strengthen our capabilities and presence in these areas and expand their contributions to earnings. In Europe, to help clients meet their financing needs for asset purchases and corporate acquisitions, we offer one-stop shopping for the full range of classes of asset financing, such as senior loans, mezzanine loans, and investing in a portion of equity. We plan to build our asset finance business into another major source of revenue by drawing on the sourcing capabilities of Nomura Group, our leading track record in M&A, and the risktaking and pricing expertise we have developed in Europe and the United States.
Enhancing the Operations of Nomura Capital Investment (NCI)
Growth in leveraged finance is anticipated in Japan due to the increasing scale of M&A deals targeting industrial realignment and an increase in management buyouts (MBOs) aimed at revitalizing enterprises through reorganizations and restructuring. To meet the funding needs associated with these deals as expeditiously as possible, we have bolstered the operations of NCI to enable it to offer senior and mezzanine loans.
As a result, during the fiscal year under review, NCI began its activities by making loan arrangements for an MBO by Yagi Corporation. This was followed by management-employee buyouts (MEBOs) for Tsubaki Nakashima and Sunstar.
Establishment of a Private Fund for Urban Redevelopment
In 2004, we established a fund with the Development Bank of Japan (DBJ) as a partnership to develop mezzanine financing in the real estate industry. During the fiscal year under review, we established the Urban Redevelopment Private Fund with the DBJ to apply the know-how accumulated thus far to real estate equity. As a result, we have put in place an integrated system for offering senior loans, mezzanine financing, and equity financing
boundaries in investing activities, domestic and international that can respond to the funding needs of a wide range of real estate projects.
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