Japan’s biggest banks and brokerages agreed to set up a $1.8 billion fund with China’s state-run investment group to help companies enhance trade between the nations.
The fund with China Investment Corp. is expected to raise between 100 billion yen and 200 billion yen ($1.8 billion), Nomura Holdings Inc. spokesman Kenji Yamashita said by phone. The other participants are Mitsubishi UFJ Financial Group Inc., Sumitomo Mitsui Financial Group Inc., Mizuho Financial Group Inc. and Daiwa Securities Group Inc.
“The fund aims to enhance bilateral trade and investment relations between China and Japan by investing in Japanese companies seeking to expand their businesses into China, as well as Chinese companies and companies from other third-party countries,” Nomura said in a statement.
Nomura is seeking to expand in China, having this year applied to acquire a majority stake in a securities joint venture as authorities there loosen ownership rules. Under Chief Executive Officer Koji Nagai, Japan’s biggest brokerage is seeking to do retail and wholesale business in the country to make up for diminishing growth opportunities at home and faltering results in Europe.
CIC, China’s $941 billion sovereign wealth fund, has been promoting bilateral funds to boost investments and reduce potential barriers in overseas markets. In August, it announced the closing of an initial $1.5 billion round for a $5 billion China-U.S. manufacturing fund with Goldman Sachs Group Inc.