TOKYO: Mizuho Financial Group Inc is carving out a lucrative niche in Japan’s equity capital market by bridging the ravenous US demand for artificial intelligence (AI) fundraising and its home country’s deep pool of retail savings.
Anthropic PBC’s listing is the third in a string of blockbuster deals where Mizuho snagged a key role, looking to raise as much as US$3.5bil from Japanese investors.
It shows that the bank is able to leverage its success in building a US business to compete on a market traditionally dominated by Nomura Holdings Inc, where domestic deals have hit a drought.
The Claude chatbot maker is following SpaceX in bringing a mega deal to the Japanese market, attracted to its cash-rich retail investors and a streamlined offering process.
The country’s households have about 2.4 quadrillion yen (US$15 trillion) in financial assets, with roughly half parked in currency and deposits, according to the Bank of Japan.
Mizuho has spent more than a decade to broaden its presence in the United States in pursuit of ambitions to become Asia’s top investment bank.
As a result, it was able to get the IPO roles and a leg up on local competitors, including Nomura, the dominant force in Japanese equity underwriting.
On this year’s global equity and equity-linked league table, Mizuho is ranked 18th, the highest among Japanese banks, compared with 21st for Nomura, according to Bloomberg-compiled data.
While Nomura has commanded more than a quarter of Japan’s dwindling IPO market, that stronger overseas franchise is increasingly relevant to Mizuho’s strategy.
Expansion abroad helped build a closer relationship with global issuers, while its domestic banking network gives it distribution at home, a potent combination for global deals.
“There is a potentially powerful flywheel here: access to marquee global IPOs can help Mizuho attract Japanese retail customers, while demonstrating access to Japanese retail demand can help it win roles on future global IPOs,” Bloomberg Intelligence analyst Michael Makdad said.
These have become a crucial part of Japan’s IPO market, where the number of domestic deals is at the lowest in 13 years.
Showing the lack of recent marquee deals, just the Japanese tranche of the Anthropic listing is set to be the biggest in the country since SoftBank Corp’s debut in 2018, according to Bloomberg-compiled data.
Japan’s third-biggest bank was also on the SpaceX deal, which raised US$2.2bil from Japanese retail investors, and handled the local tranche of SoftBank Group Corp-backed PayPay Inc’s listing, the biggest by a Japanese company on a US stock exchange in a decade.
All of them took advantage of a structure known as a public offering without listing (POWL), where foreign issuers are able to sell shares directly to Japanese retail investors concurrently with an offshore IPO, without listing on the Tokyo Stock Exchange.
“Mizuho has raised its profile in US investment banking, and that has helped it win roles on those global deals,” said Toyoki Sameshima, an analyst at SBI Securities Co in Tokyo.
Mizuho under chief executive officer Masahiro Kihara has accelerated its international expansion, most notably through the acquisition of boutique mergers advisory firm Greenhill & Co. — Bloomberg
