Japan’s second-largest brokerage house Daiwa Securities’ has dropped its plans for a $5 billion Asian private equity fund after talks with Blackstone (who was to be the co-sponsor of the fund) failed to materialise. Last August Daiwa had announced that it is looking at a 500 billion yen ($5.4 billion) fund to diversify its revenues. Now Daiwa is looking to set up smaller funds worth $200-300 million on its own.
The global fund crunch has hit the private equity firms as well who are facing redemption pressures from their limited partners.
Even though a large portion of the overall Asian fund would have found its way into China and the rest of South East Asia, given that Daiwa recently started I-banking services in the country, it could have led to some of the funds coming into India. Daiwa set up an office in Mumbai last August aiming to route Japanese investments into India. The firm appointed Vaishali Sinha as the India head of investment banking at Daiwa Securities SMBC.
Daiwa Securities SMBC is a 60:40 JV between Daiwa Securities Group and Sumitomo Mitsui Financial Group with Daiwa holding the majority stake.