Nomura braced for Southeast Asia infra boom

The Japanese bank has noted increased demand from high-net-worth players as they seek ‘growth, not just yield’ across the region.

Japan’s Nomura Holdings is seeing increasing demand from Asian high-net-worth individuals, high-profile business owners and corporates for increased investments in Asian infrastructure.

The demand is driven by a pool of savings available for alternative investments from these types of investors, Mitsutoshi Murakata, managing director and head of Asia infrastructure project office, told Infrastructure Investor.

While large-scale institutional investors typically prefer to buy stakes in core assets backed by long-term contracts, particularly in the power sector, his clients have a broader appetite for businesses across the infrastructure spectrum, including both greenfield and brownfield projects, and are looking to purchase majority stakes.

“It’s a strategic play,” he said. “They are looking for growth, not just yield.”

Murakata anticipates large amounts of capital to be available from his clients to invest in infrastructure. That includes opportunities backed by strong economic fundamentals across Southeast Asia but also assets that are complementary to investors’ wider portfolios, such as building a toll road which links to a property portfolio, he explained.

Murakata said his team is working on several greenfield and brownfield projects in the region and is in position to help introduce partners and potentially co-invest with his clients.

Nomura set up its infrastructure office in Singapore in August 2016 to develop a new growth area for the investment banking group and capitalise on demand for funds to finance Asian infrastructure. Last month, Nomura hired Anoop Chaudhry, a former Barclays banker, as the head of infrastructure and utilities sectors in Asia excluding Japan investment banking. Chaudhry’s team is expected to work closely with Murakata’s Asia infrastructure project office.