Japan’s SMFG Set to Form Joint Investment Banking Venture with U.S. Securities Giant Jefferies Financial Group

The Yomiuri Shimbun

16:29 JST, September 19, 2025

Sumitomo Mitsui Financial Group Inc. has begun discussions to increase its investment in U.S. securities giant Jefferies Financial Group Inc. to make SMFG an equity-method affiliate as well as establish a joint venture for investment banking.

The goal is to provide integrated support for the financing needs of Japanese companies, such as initial public offerings, both domestically and internationally.

The two companies entered into a capital alliance in 2021.

SMFG will increase its stake to 20%, up from the current 14.5%, according to sources. As Jefferies’ market capitalization is about $13.7 billion (about ¥2 trillion), it would require at least ¥110 billion to acquire the additional 5.5% stake.

Following this, SMFG subsidiary SMBC Nikko Securities Inc. will establish a joint venture with Jefferies, and SMBC Nikko will hold the majority stake.

SMBC Nikko will transfer a portion of its investment banking business to the new company, which will provide financing support services, such as IPOs and capital increases through stock issuance.

The additional investment and the establishment of the joint venture will be carried out after obtaining approval from Japanese and U.S. financial authorities.

According to the Financial Times, Jefferies ranks among the top 10 globally in terms of receiving funds from stock issuance and consulting services for mergers and acquisitions, trailing only firms like Goldman Sachs in the United States.

SMFG was tasked with strengthening its investment banking business.