Mitsubishi UFJ Trust and Banking is set to introduce three loan funds totaling up to 100 billion yen ($670 million) in fiscal 2024, targeting institutional investors such as insurance companies and pension funds. The move marks a significant expansion in the bank’s loan fund business, with plans to increase its balance to nearly 500 billion yen by fiscal 2026.
The new funds will focus on leveraged buyout loans in Japan and the U.S., as well as global infrastructure financing. This initiative leverages Mitsubishi UFJ Financial Group’s existing screening processes for mergers and acquisitions and infrastructure projects.
This strategy aligns with growing investor interest in private debt, which has seen an 80% increase in domestic participation over the past four years, according to investment data firm Preqin. The funds offer institutional investors alternative options for risk diversification beyond traditional stocks and bonds.
While loan funds are more common in the U.S. and typically managed by asset management firms, Japanese banks are taking the lead in this sector domestically. This approach could reshape Japan’s corporate financing landscape, potentially facilitating easier fundraising for M&A deals and providing investors with new asset allocation opportunities.
