TOKYO: Nomura Holdings aims to expand its US credit portfolio to US$50 billion (RM236.8 billion) within 10 years and may seek small acquisitions to beef up its private credit business, the top Japanese investment bank's US asset management chief said.
The goal is line with Nomura's strategy to increase investments in private markets and diversify sources of revenue to cushion the impact from wild fluctuations in the performance of its global trading business.
"We want to definitely grow this (US credit) business collectively, quite substantially over the next five to 10 years to US$50 billion or more" in assets under management, Robert Stark, who heads the US asset management business, told Reuters in an interview.
Nomura Capital Management (NCM) currently has US$35 billion assets under management, the vast majority of which is a high-yield bond portfolio, according to Stark, who is also the chief executive of the 80-member unit.
Nomura last month created NCM to combine its 33-year-old high-yield bond business and a private credit business that it launched just two years ago.
On the private credit side, the entire build-up had been purely organic as it hired 25 people over the last two years, but it's "more likely that we do more significant moves in terms of team lift-outs or small acquisitions," Stark said. "It's time for the next phase."
He said the unit's focus will remain the same, on more niche areas such as asset-based lending and real estate lending instead of large sponsor-backed deals.
London-based data firm Preqin forecast the global market for private credit, which largely involves leveraged loans made to indebted companies, to grow to US$2.7 trillion by 2028 from nearly US$1.5 trillion in 2022.
Non-bank lenders, or shadow banks, have expanded their lending in recent years as they faced fewer regulatory hurdles than traditional lenders. Wall Street banks have also joined forces with private equity giants and asset managers to expand their private credit businesses.