Merril Lynch Japan closed its principal investment division this Feburay. The division has not made any investments in the last 3 years, a smart decision given recent events.
Nomura Principal has been very busy revitalizing not only Skylark (a restaurant chain) but also Ashikaga Bank (one of the largest regional banks). Nomura Principal made a large investments in both companies. Currently, Nomura Holding has suspended new principal investments. Regarding Nikko Principal, Nomura has missed the exits for portfolio companies like Bell System 24 in the last year.
Since companies demand money that banks are reluctant to lend, those companies often turn to securities principal firms next. Securities firms may have money to invest, but they have been kept very busy taking caring of battered portfolio companies.
Goldman Sachs has either taken a great leap of faith toward USJ or had their hand forced because they did not have enough shares to control the company.
March 22, 2009
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