Neuberger and SMBC Forge First-of-its-Kind Private Debt Alliance in Japan
Neuberger Berman’s Japanese subsidiary has reached an agreement with Sumitomo Mitsui Banking Corporation (SMBC) to establish a joint venture aimed at managing private debt funds focused on the domestic market. The partnership marks the first time a major Japanese financial institution has teamed up with an independent global asset manager to co-run a General Partner (GP) for domestic leveraged buyout (LBO) loans.
Market Positioning
The joint venture intends to capitalize on the expanding Japanese LBO loan market, which is increasingly viewed as a viable alternative to traditional bank lending with significant room for growth. By combining SMBC’s extensive deal origination and credit underwriting capabilities with Neuberger Berman’s decades of private investment expertise, the entities aim to build a "direct lending ecosystem" optimized for the Japanese economy.
Key features of the collaboration include:
- Target Assets: Primarily domestic LBO senior loans.
- Operational Goal: Providing strategic, efficient access for both domestic and international investors to the Japanese private debt market.
- Value Proposition: Utilizing Neuberger’s "best practices" from the North American market to support business succession, restructuring, and growth investments in Japan.
Global Expertise, Local Application
Neuberger Berman’s Japanese Private Debt division will be supported by its U.S. counterpart. Since its inception in 2013, the firm’s global private debt arm has managed $25 billion in assets and invested over $29 billion in more than 250 private equity-backed companies. Notably, the division has maintained a disciplined credit profile, reporting an annualized default rate of just 0.03% and a loss rate of 0.01% as of March 2026.
Ryo Ohira, President of Neuberger Berman Japan, noted that diversifying the lender base will increase market depth and provide more stable capital for Japanese corporations. The move is expected to foster healthy competition and transparency within the LBO market, ultimately aiding the international competitiveness of Japanese firms.
Norbert Gehrke
