Citigroup, Daiwa are latest to expand Japan dealmaking teams
This is due to hostile takeovers no longer being taboo, and private equity and activist investors are more prominent
[TOKYO] It is a good time to be an investment banker in Japan, with Citigroup and Daiwa Securities Group joining a raft of firms that are seeking to expand their advisory teams during the nation’s dealmaking boom.
Citi plans to increase its investment banking division by about 30 per cent by the first half of 2026, Japan vice-chair Masuo Fukuda said in an interview, while declining to give a headcount figure.
Daiwa has resumed hiring merger advisory staff overseas, and is boosting a team of cross-border deal specialists, said chief executive officer Akihiko Ogino.
Japanese companies have become more open to deals, following corporate governance reforms that have made executives and directors more attuned to shareholders’ needs.
Some are selling non-core assets, while others are pursuing acquisitions to boost growth opportunities abroad. Hostile takeovers are no longer taboo, and private equity and activist investors are playing a greater role.
“This is a major turning point for the Japanese market,” said Akira Kiyota, who joined Citi Global Markets Japan from Nomura in October as co-head of investment banking in Japan.
The increase in the number and complexity of deals means “the need for financial advisers is growing, and our role will continue to expand”, he added.
Mergers and acquisitions (M&A) deals involving Japanese companies are approaching US$350 billion in 2025, the most since Bloomberg began collecting the data in 1998.
“There practically isn’t a single day without some kind of corporate action taking place as far as the Japanese market is concerned,” Daiwa’s Ogino said. “It is truly vibrant.”
The comments mark a shift from Ogino’s more cautious posture six months ago, when he ordered a pause on such hiring after US President Donald Trump’s tariff announcements clouded the outlook for deals.
Since then, Daiwa has reported strong growth in M&A-related earnings, thanks to the jump in transactions in Japan.
Daiwa remains on course to increase the number of its M&A bankers worldwide from about 640 currently to 900 by March 2031, Ogino added. It launched a four-member team focusing on cross-border transactions in April, and has recently added two more to the group.
Daiwa and Citi are not the only firms that are bolstering their ranks. Goldman Sachs revamped its M&A advisory operations this month. Jefferies Financial and UBS have also made key appointments.
Goldman is also ramping up deals of its own in Japan.
The Wall Street bank is looking to invest more than US$5 billion in the coming decade, in areas such as management buyouts and carve-outs, said Yu Itoki, managing director in its Japan unit’s growth equity and private equity team.
All that activity is making it harder for firms to find the best people.
“The competition for talent is intensifying, requiring us to move fast with recruitment,” Citi’s Fukuda said. In March, he said he wanted to grow the investment banking team by 15 per cent. The firm’s Japan securities unit has about 900 employees.
When asked about the outlook for the Japanese market in 2026, Kiyota said external factors and various pressures mean that companies would “have no choice but to pursue corporate actions”.
The Bank of Japan’s decision last week to raise benchmark interest rates to a 30-year high of 0.75 per cent is unlikely to slow deal activity, he added.
Citi’s Japan investment banking business is expected to post its highest annual revenue since the firm severed ties with local brand Nikko in 2009, said the division’s other co-head, Taiji Nagasaka.
The firm ranked 10th among advisers on such transactions and 11th for underwriting Japanese equity and equity-linked deals, indicated data compiled by Bloomberg.
As for Daiwa, the Tokyo-based firm is considering raising its revenue target for its mergers advisory business for the year ending March 2031 to 100 billion yen (S$824.7 million) from the current 70 billion yen, Ogino said.
It aims to become one of the world’s top five advisers for mid-cap M&A, which it defines as those worth US$500 million or less, he noted. The firm is 14th for such transactions this year, the data show. BLOOMBERG
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