Fuji Bank will become the first Japanese bank to set up a company for mergers and acquisitions, it was learned Wednesday. The new company, Fuji Capital Management, will start operations in February with an investment fund pool of 20 billion yen, industry sources said. The company will provide investment funds to promising firms with the goal of reaping high capital gains when they go public. The Fuji Bank group will hold nearly 50 percent of the new firm, while the rest will be owned by life insurers, nonlife insurers that have close relations to the bank and individual investors, the sources said. Japanese banks have lagged behind their Western counterparts in merger and acquisition activities, so far engaging in them only through participation in investment funds created by foreign financial institutions. Fuji Bank, Dai-Ichi Kangyo Bank and the Industrial Bank of Japan plan to jointly establish a holding company this fall to integrate their operations. The new financial group will make Fuji’s investment company the core of its investment banking activities, the sources said.

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