SMFG, Nippon Life in Talks to Start $3 Billion LBO Loan Fund

Sumitomo Mitsui Financial Group Inc. and Nippon Life Insurance Co. are in talks to set up a private credit fund with initial capital of at least ¥500 billion ($3.1 billion), people familiar with the matter said, as the Japanese financial giants seek to capitalize on a surge in corporate deals.

Japan’s second-largest bank and biggest life insurer are working on the details of the fund, which will provide loans for leveraged buyouts and other areas such as real estate transactions and mezzanine financing, said the people, who asked not to be identified because the discussions are confidential.