The Japanese brokerage house said that difficulties in raising
such a large vehicle played a role in the discussions falling apart. "It
is difficult to collect ¥500 billion in private equity fund in this
environment," Daiwa Securities chief executive Shigeharu Suzuki told
Reuters. The cancellation of the new fund is an ill wind for the
private equity industry. Although LBO firms currently have billions in commitments for their current funds, the credit crisis has dealt a
severe blow to their ability to raise new funds.
Daiwa will now likely try to raise smaller private equity funds ranging
between ¥20 billion to ¥30 billion. The megafund would have
targeted Asian companies for buyouts and was part of a push by Daiwa to
diversify its revenue stream. The firm already has its own buyout fund
-- Daiwa Securities SMBC Principal Investments -- that already invests
the bank's capital in LBO deals. -
George White See Reuters story
Daiwa Securities Group Inc. is scrapping plans to raise a ¥500 billion ($5.4 billion) private equity megafund after discussions with Blackstone Group LP about managing it fell through. 
