Japan's Daiwa aims to tap private equity ties in push for Europe advisory gigs

TOKYO, Feb 5 (Reuters) - Daiwa Securities Group Inc plans to leverage its close relations with mid-market European private equity funds looking to sell assets, as it works to advise more Japanese companies bent on sealing M&A deals on the continent.

Japan’s second-largest investment house by revenue after Nomura Holdings Inc also aims to hire five to 10 bankers for its new office in Italy, where Daiwa sees potential mid-sized manufacturing merger-and-acquisition (M&A) targets.

Daiwa’s pursuit of growth in Europe reflects efforts to boost advisory income, which helped its global investment banking unit post a one-third year-on-year increase in October-December revenue of 17.5 billion yen ($159.72 million).

Under its latest European recruitment push, Daiwa has also hired a Britain-based M&A banker specialised in the fintech sector, Hiroki Ikeda, Daiwa’s deputy head of global investment banking, said in an interview.

“DC Advisory has been advising many deals involving private equity (PE) funds selling assets,” Ikeda said, referring to Daiwa’s M&A advisory unit. “Among European PE funds, Japanese companies have now greater presence as potential buyers. Our strength is to introduce potential deals to Japanese buyers.”

Italy has been fertile ground for Japanese dealmakers. In October, Calsonic Kansei bought Magneti Marelli from Fiat Chrysler Automobile NV for 6.2 billion euros ($7.09 billion) to form the seventh-largest independent car parts supplier. Previously, Asahi Group Holdings Ltd bought Italian beer brand Peroni from SABMiller following the British brewer’s 2016 merger with Anheuser-Busch InBev NV.

Among mid-sized European acquisitions, worth up to $500 million, Japanese buyers have spent $19.6 billion over the past five years, Refinitiv data showed. Daiwa ranked 15th in a league table of advisors for such deals last year.

Of deals in that band, Daiwa in 2016 advised on air-conditioner maker Daikin Industries Ltd’s 98 million euro purchase of Zanotti, an Italian manufacturer commercial-use refrigerators and freezers.

Though its focus is mid-sized, Daiwa’s biggest European advisory work of late was in December with Taisho Pharmaceutical Holdings Co Ltd’s $1.6 billion purchase of Bristol-Myers Squibb Co’s French consumer health unit.

DC Advisory has offices in Britain, France, Germany and Poland, plus Spanish boutique investment bank Montalban Atlas Capital bought for an undisclosed sum in December. Ikeda said Daiwa would study further M&A opportunities, should any arise. ($1 = 109.5700 yen) ($1 = 0.8744 euros)

Reporting by Taiga Uranaka; Additional reporting by Pamela Barbaglia in LONDON; Editing by Jennifer Hughes and Christopher Cushing