Nomura Holdings Inc. agreed to buy boutique investment bank Greentech Capital Advisors, a rare overseas acquisition for Japan’s biggest brokerage as it seeks to boost its U.S. presence.
Founded in 2009 by Jeff McDermott, previously a co-head of investment banking at UBS Group AG, Greentech specializes in sustainable investing. It has helped Macquarie Group Ltd., Goldman Sachs Group Inc. and others buy and sell wind and solar farms. The transaction is scheduled to close March 31, according to a statement Wednesday that didn’t disclose terms.
More than 70 people in New York, San Francisco and Zurich will be joining the firm in a new team called Nomura Greentech. The plan is to expand the team further as McDermott sees a “massive growth build-out” in low carbon and alternative energy infrastructure in Asia, he said in a telephone interview.
Nomura has been quiet on overseas acquisitions since it bought bankrupt Lehman Brothers Holdings Inc.’s European and Asian assets in 2008, a deal that swelled costs and led to a writedown. The Tokyo-based firm unveiled plans earlier this year to boost its advisory business for companies in markets including the U.S., while cutting expenses in areas such as securities trading.
“We are looking to grow our global investment bank, we’re looking to grow our presence in the Americas, and we’re looking to grow our advisory business,” Michael Rintoul, head of investment banking at Nomura Americas, said by phone. The two dealmakers previously worked together at UBS. “With this transaction we accomplish all of those objectives.”
The deal brings Nomura sustainable investing expertise as incoming Chief Executive Officer Kentaro Okuda seeks to accelerate growth in the U.S. and China to offset a slump in Japan. The lender also plans to form a sustainability research center to help clients address risks related to climate change.
“It seems to make sense thematically,” said Michael Makdad, an analyst at Morningstar Inc. in Tokyo. “Nomura continues to see U.S. investment banking as necessary for its future growth,” and many Japanese companies are investing in renewable energy assets abroad, he said.
Shares of Nomura fell 1.5% in Tokyo on Thursday morning, paring this year’s gain to 31%. Nomura has rallied in recent months on signs of a rebound in its global wholesale business after current CEO Koji Nagai began his $1 billion cost-cutting initiative.
Daiwa Securities Group Inc. is also bolstering its advisory business in the environmental sector. Japan’s second-biggest brokerage entered a joint-venture agreement with renewable energy adviser Green Giraffe in October.
Source: Bloomberg L.P.
