TOKYO — Mizuho Bank has agreed to acquire a stake of less than 5% in U.S. asset manager Golub Capital, paving the way to offer the company’s alternative investment products to affluent people in Japan.
Mizuho announced the agreement, which includes exclusive sales rights in Japan, on Tuesday. Its investment will be in the tens of billions of yen (10 billion yen equals $70.3 million).
Golub is a leading North American management company in the field of private debt, in which funds collected from investors are loaned to midsize businesses. Lending rates are variable, and profits are comparatively insulated from inflation.
Golub’s products are expected to attract Japanese investors who prefer stable returns.
The Japanese bank’s parent, Mizuho Financial Group, looks to bolster its asset management services for investors. As of the end of March, its assets under management totaled 69 trillion yen, or $482 billion. The bank aims to reach $1 trillion within 10 years.
Asset Management One, in which Mizuho Financial has invested with Dai-ichi Life Holdings and others, gives the group strength in stocks and bonds, but alternative investments have been a weakness up to now.
Demand for alternative assets — which account for about 20% of the world’s assets under management — is strong among Japan’s wealthy. The private debt market in particular is expected to grow at a rate of about 11% per year.
Mizuho decided to invest in Golub considering the challenges of developing and managing its own private debt investment products in-house. The bank is expected to start selling Golub products to domestic institutional investors like pension funds as well as the wealthy as early as next year. Golub will benefit from spreading its products through Mizuho’s broad customer base.
Golub was founded in 1994. While many other investment management companies that handle private debt were founded in the 2010s, its long history includes overcoming the 2008 global financial crisis.
