Sumitomo Mitsui Financial Group (TYO:8316) subsidiary SMBC Nikko is considering launching a 100 billion yen mezzanine fund to help finance big acquisitions in Japan, Bloomberg News reported Monday, citing people familiar with the matter.

Mezzanine financing falls between a senior loan by conventional financial institutions and equity financing using common shares.

The fund plans to invest in subordinated loans and preferred shares for Japanese acquisition deals, the report said.

SMBC Nikko is teaming up with alternative asset manager One Investment as a partner and is looking for institutional investors outside of Japan to raise money for the fund, the report said, citing some of the sources.

Sumitomo Mitsui Financial Group and One Investment reportedly declined to comment on the matter.

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