Tokyo, February 24, 2021 - Nomura Holdings, Inc. ("Nomura") and Japan Search Fund Accelerator ("JaSFA") today announced that they have signed a memorandum of understanding to form an investment business limited partnership that will invest in search funds, as well as jointly conducting business operations.

According to Search Fund Primer published by Stanford GSB in 2020, a search fund is a "new investment vehicle" which allows "aspiring entrepreneurs the opportunity to search for, acquire, manage, and grow a company." The model was pioneered in the United States in 1984 and more than 300 first-time search funds were identified by 2018. In Japan, there is rising interest in search funds as a new entrepreneurship model for young business professionals who aspire to be business owners.

Japan has a growing number of aging small and medium-sized business owners. According to the Ministry of Economy, Trade and Industry (METI), more than half of SMEs with aging owners have no potential successors. To encourage succession by third parties, METI created the "Comprehensive Package of Measures for Supporting SMEs in Business Succession to Third Parties." This initiative aims to ensure that profitable SMEs faced with the possibility of business closure find good successors, and that resources such as technologies and employment are passed on to the next generation.

Nomura offers a wide range of financial services including corporate M&A advisory services, financing and investment management to meet the business succession needs of clients across Japan. JaSFA has a solid track record in business succession leveraging the search fund model. The company connects searchers with investors and business owners and supports companies in enhancing their corporate value.

By partnering together, Nomura and JaSFA aim to offer the option of third party succession to corporates facing business succession challenges and provide entrepreneurship opportunities for the next generation of talented young people. The two companies will help clients raise their corporate value in order to contribute to the sustainable growth of regional economies.