Japan's Sumitomo Mitsui Banking Corp and U.S. asset manager Neuberger Berman are teaming up on a private credit fund to finance Japanese companies making acquisitions. Target size: 100 billion yen ($627 million) within the first year, with plans to scale to 500 billion yen ($3.1 billion) over five years.
Launch is expected in June 2026.
The Details
The structure splits neatly. Neuberger raises capital from institutional investors, identifies M&A opportunities, and structures the lending. SMBC brings its banking relationships and deal flow across Japanese corporates.
Japan's M&A market hit a record 38 trillion yen in 2025, an 86% jump year on year. The number of deals also reached an all-time high. Yet more than 80% of listed Japanese company fundraising still comes from traditional bank borrowing.
That gap between surging deal activity and old-fashioned financing is exactly what the fund targets. Japanese companies pursuing acquisitions need flexible capital that moves faster than a syndicated bank loan, with terms structured around the specific deal rather than the borrower's general credit profile.
SMBC is also considering a separate fund with Nippon Life Insurance. Other Japanese banks have noticed the same opportunity: Aozora Bank and Resona Bank launched similar private credit vehicles in 2025.
The bigger picture for APAC private credit
Private credit across Asia-Pacific is entering what SC Lowy CEO Michel Lowy calls a "structural expansion." SMBC's own APAC Real Estate Credit strategy has already secured $165 million.
The logic is straightforward. Japan's corporate sector is consolidating. Companies are buying rivals, spinning off divisions, and restructuring ownership, all of which require financing that sits between equity and traditional bank debt. With deal volume at record highs and banks still lending the old way, private credit fills a gap that keeps widening.
At $627 million, the initial fund is modest by global standards. The five-year target of $3.1 billion is the number worth watching. If Japanese M&A volume holds anywhere near 2025 levels, the demand for acquisition financing will outpace what the fund can supply.
Sources: DealStreetAsia, SMBC
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