Report: Daiwa abandons ¥500bn fund plans

The Japanese brokerage had reportedly hoped to team with Blackstone to form an Asian mega-fund, but will instead raise its own funds targeting ¥20bn to ¥30bn.

Daiwa Securities Group has revised its ambitions of raising a ¥500 billion (€3.9 billion; $5.3 billion) private equity fund in partnership with The Blackstone Group.

“It is difficult to collect ¥500 billion [for a] private equity fund in this environment,” Shigeharu Suzuki, Daiwa Securities chief executive, told Reuters.

Though the brokerage had been in talks with Blackstone about raising an Asia mega-fund together, he said Daiwa Securities is now looking to launch its own funds of up to ¥20 billion or ¥30 billion. No reason was given as to why a potential partnership with Blackstone was abandoned.

It is difficult to collect ¥500 billion … in this environment.

Shigeharu Suzuki

In October 2008, Blackstone agreed to invest $2 billion in Korean deals alongside Korea’s National Pension Service. The pension struck similar deals the same month with Oaktree Capital Management and MBK Partners.

Last year, Blackstone expanded its Asian activities significantly. In September, the firm established its first mergers and acquisitions advisory unit in Asia. In August, it launched Altius Advisors, an Asia Pacific-focused hedge fund, and also opened a Beijing location, marking its fourth private equity-focused office in the region.

Daiwa Securities said in August it wanted to move away from a dependence on stocks and bonds, and increase its exposure to private equity and real estate. Historically Daiwa Securities Group has participated in deals alongside Daiwa Securities SMBC Principal Investments; in June, the two parties invested $100 million in Hopu USD Master Fund I, a China-focused fund concentrating on opportunities arising from the restructuring of state-owned enterprises.