Mizuho Taps Japan's Retail Savings to Bring Big U.S. IPOs Home

What happened

By tying the boom in U.S. artificial-intelligence fundraising to Japan's vast household savings, Mizuho Financial Group Inc. is staking out a larger place in the nation's equity capital market. Anthropic PBC's deal follows SpaceX in choosing Japan to reach cash-heavy individual investors through a simplified route, with the Anthropic Japan allocation targeting as much as $3.5 billion.

This is Mizuho's third straight marquee assignment, underscoring how its U.S. buildout is paying off in a market long led by Nomura Holdings Inc. Japan's third-largest bank will have Mizuho Securities Co. run the domestic slice of Anthropic's sale. Mitsubishi UFJ Financial Group Inc. is among the underwriters, and investor orders will be taken by Goldman Sachs Group Inc., Mitsubishi UFJ Morgan Stanley Securities Co., Morgan Stanley MUFG Securities Co., Rakuten and SBI.

All these deals have used a structure called a public offering without listing. In plain English: foreign issuers can market shares to Japanese individual investors at the same time as an offshore IPO, without listing in Tokyo. Mizuho's spokesperson declined to comment.

How Mizuho built the position

More than a decade of expansion in the U.S. to pursue a goal of becoming Asia's top investment bank gave Mizuho a seat at the table for global IPOs, edging past domestic rivals including Nomura, which still controls more than a quarter of Japan's shrinking IPO market. The combination of relationships with international issuers and a nationwide branch network at home has become a useful mix as domestic listings slumped to a 13 year low.

Bloomberg's current global equity and equity-linked league table shows Mizuho in 18th place - the top spot among Japanese banks - with Nomura at 21st. Under Chief Executive Officer Masahiro Kihara, Mizuho has accelerated abroad, buying boutique adviser Greenhill & Co. and landing one of four top underwriting roles on Arm Holdings Ltd.'s 2023 listing, helped by long ties to SoftBank Group.

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The deals and the scoreboard

Mizuho worked on the SpaceX offering that pulled in $2.2 billion from Japanese retail buyers and ran the local portion of PayPay Inc.'s listing, the largest listing by a Japanese company on a U.S. exchange in a decade. Past offerings via this route have not always rewarded buyers: PayPay trades below its $16 offer price after its March debut, and SpaceX shares at one stage dipped under the IPO price and have since hovered near where investors got in.

Even so, appetite is strong.

Nomura, for its part, highlights long practice in this channel. According to a Nomura representative, the bank has managed more than 30 public offerings without listing since 2001, has developed deep know-how in retail distribution and in scrutinizing deals, and evaluates each prospect individually with an emphasis on investor protection and clear explanations. The Japanese slice of Anthropic's offer is poised to be the country's largest since SoftBank Corp.'s 2018 debut, based on Bloomberg data.

Why it matters for your portfolio

Per the Bank of Japan, households in Japan hold about ¥2.4 quadrillion (around $15 trillion) in financial assets, and roughly half of that remains parked in cash and deposits. That reservoir of savings is now being channeled into the largest global equity raises, particularly anything with an AI label.

If Mizuho keeps proving out demand - as it did with SpaceX - more high profile issuers may route a retail portion through Japan. That could mean more access to blockbuster names for local buyers, but with returns that can be uneven after the first trade. The bottom line: more deal flow, bigger tickets, and a growing role for Japan's retail money in setting the tone for global listings.

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