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Daiwa aims for top five spot in global mid-cap M&A advisory

Tan KW
Publish date: Tue, 06 Jun 2023, 10:20 AM
Tan KW
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TOKYO: Daiwa Securities Group Inc aims to be among the top five banks in merger and acquisitions advisory services for mid-cap deals by financial year 2030 as Japan’s second-largest brokerage and investment bank accelerates its global push, its chief executive says.

“We are still in an expansion phase right now, where we need to spend upfront costs to hire more bankers and buy boutique firms for top line growth,” chief executive Seiji Nakata said in an interview.

The ambition to join the ranks of Rothschild & Co and Houlihan Lokey Inc comes as Daiwa last week laid out its midterm strategy targeting a 50% jump in global M&A advisory revenue and a 40% increase in banker headcount by the year ending March 2031.Focusing on deals of less than US$500mil to avoid direct competition with top Wall Street investment banks, Daiwa ranked eleventh in the league table for mid-cap M&A advisory last year, according to the company.

Nakata said the foundation of the business has already been established and the bank would need to supplement the business with more bankers and acquisitions of boutiques, mainly in the United States whose fee pool is the world’s largest.

Daiwa built its footing in cross-border M&A advisory through the acquisition of the M&A unit of Britain’s Close Brothers Group in 2009. It bought two boutique M&A advisory firms - Sagent Advisors and Signal Hill Holdings LLC - in 2017 to beef up US operations.Nakata said Daiwa plans to focus its overseas expansion on M&A advisory and to hold off from stretching its balance sheet further for other investment banking areas such as equity underwriting for now, in contrast with some of its domestic rivals.

 - Reuters

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