Nomura Back in Hiring Mode for U.S. Bankers After Cost Cutsby
COO Ozaki sees ‘tremendous business opportunities for M&A’
Increased Tokyo bankers by about 15% for cross-border deals
Nomura Holdings Inc. plans to hire bankers in the U.S., resuming a push to boost investment-banking business in a market that remains a priority for Japan’s biggest brokerage following a round of cost cuts.
The Tokyo-based firm anticipates rising volumes of mergers and stock offerings in the U.S., said Chief Operating Officer Tetsu Ozaki, who is seeking bankers to cover industries including technology, consumer and pharmaceuticals. While the brokerage has no clear numerical target, it has room to recruit 20, Ozaki said in an interview on Aug. 15.
His remarks reflect Nomura’s strategy to selectively tap opportunities for growth in the world’s biggest investment-banking market, even as it shrinks in areas such as equity research and leveraged finance. Chief Executive Officer Koji Nagai this year began eliminating jobs and shutting businesses in Europe and the Americas to save about $700 million and stem six years of losses abroad. At the same time, he is seeking to regain lost ground in cross-border mergers advice as Japanese companies increasingly look overseas for growth.
“There are tremendous business opportunities for M&A and currency hedging in the Americas,” said Ozaki, 58, who took the post in a management shuffle in April. “Our clients will pay closer attention to the region over the next five to 10 years.”
Ozaki joined Nomura in 1982 after graduating from the University of Tokyo. He worked in the bank’s fixed-income division in Tokyo and London, before becoming global head of equities in 2004 and then deputy president of Nomura’s brokerage unit in 2012.
Nomura bolstered its oversight of the Americas in April with the appointment of Tsutomu Takemura as joint head of the region alongside existing chief David Findlay. Takemura, formerly co-head of investment banking in Europe and currently one of the youngest senior managing directors, has a “big mission” to recruit bankers, Ozaki said.
Ozaki is reviving the hiring plans after Nomura posted its biggest pretax profit abroad in seven years for the quarter ended June 30, driven in part by fixed-income revenue from the U.S. Global investment banking chief Kentaro Okuda outlined the firm’s ambitions to hire bankers in the U.S. in an interview in December, before investment banks globally had one of the worst quarters in years in what CEO Nagai described as a “rainstorm.”
Nomura will seek to provide mergers advice to mid-sized U.S. companies -- those with a market value of less than $10 billion -- and work on more cross-border deals involving Japanese firms, Ozaki said. It also wants to manage more equity offerings and provide strategies for currency hedging for acquisitions, he said.
In Japan, Nomura has boosted the number of M&A bankers by about 10 percent to 15 percent since April to handle more cross-border transactions, Ozaki said, declining to disclose the headcount. In the Americas, it hired six investment bankers last year and added more than 30 junior staff. That’s after it recruited 15 senior bankers there in 2014.
Nomura was ranked third among financial advisers on mergers involving Japanese companies in the first half, data compiled by Bloomberg show. It hasn’t held the top position since 2011 after missing out on large deals between Japan and the U.S., such as Suntory Holdings Ltd.’s $15.6 billion purchase of Beam Inc. in 2014. The brokerage was 14th on cross-border transactions in the six months, according to the data.
Its ranking in the U.S. has also slipped. Nomura was 55th among merger advisers there in the first half, compared with 42nd for all of 2015, the data show.
“League-table rankings show how a securities firm is trusted over the long term, and we’re always conscious of that, especially for Japan-related M&A,” Ozaki said. “All we can do to raise clients’ satisfaction is keep striving to improve.”