Nomura, ICG to form mezzanine debt fund venture

TOKYO Thu Nov 21, 2013 3:04am EST

TOKYO Nov 21 (Reuters) - Nomura Holdings Inc, Japan's largest brokerage, and the UK's Intermediate Capital Group Plc, have agreed to form a joint venture to provide mezzanine debt to be used for acquisitions.

Nomura and ICG will set up a new company and each will inject 10 billion yen ($100 million)into the fund, they said in a joint statement on Thursday.

Mezzanine debt is commonly used by private equity firms, which typically use leverage for acquisitions. Mezzanine debt comes between senior debt and equities, meaning providers of the mezzanine debt get higher yields than senior debt providers.

The new company will also seek money from institutional investors to form the fund.

"This agreement will bring Japanese institutional investors the opportunity to access mezzanine via a fund structure," said ICG Chief Executive Officer Christophe Evain in the statement.

Any future funds structured as a result of the agreement will be jointly seeded, distributed and co-managed between Nomura and ICG, they said.

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