Investment Banking: Surge in 2026?

The Year of the Horse is off to a gallop when it comes to investment banking, whether by local powerhouses or long-standing global subsidiaries. At the end of last year, for example, Goldman Sachs Group, Daiwa Securities Group and Citigroup announced major emphasis shifts toward greater investment activity in the coming year. This can bode well for foreign residents and their growing options to stay financially active while living overseas. Taking a closer look at what motivates such leading institutions defines what could be in store ahead. 

Perspectives

Goldman Sachs is looking for clients in areas such as management buyouts, subsidiary sales and business succession planning. 

As reported by Bloomberg, “many investors think it is rational to entrust their funds as LPs (limited partners as external investors) to houses with teams and track records in Japan,” articulates Yu Itoki, managing director in Goldman Sachs’ growth equity and private equity team here. 

“There practically isn’t a single day without some kind of corporate action taking place as far as the Japanese market is concerned,” echoed Akihiko Ogino, CEO at Daiwa Securities during a Bloomberg interview. 

Akira Kiyota joined Citigroup Global Markets Japan from Nomura in October of last year as co-head of investment banking in Japan. To him, the increase in number and complexity of deals means “the need for financial advisers is growing, and our role will continue to expand,” he stresses to Bloomberg. “This is a major turning point for the Japanese market.”

Daiwa Securities

Japan’s Daiwa Securities is resuming an expansion of its mergers and acquisitions business to capitalize on a dealmaking boom at home and to lift its standing abroad. 

The country’s second-largest brokerage has restarted hiring merger advisory staff overseas and is boosting a team of cross-border deal specialists, explained CEO Akihiko Ogino in a Bloomberg interview. This marks a shift from his more cautious posture six months ago in June of last year, when Ogino said he ordered a pause on such hiring after U.S. President Donald Trump’s tariff announcements clouded the outlook for deals, according to Bloomberg. Since then, Daiwa has reported strong growth in mergers and acquisitions (M&A) -related earnings thanks to a jump in transactions in Japan.

Daiwa aims to become one of the world’s top five advisers for midcap M&A, which it defines as those worth $500 million or less, says Ogino. The firm is 15th for such transactions this year, according to Bloomberg data.

Daiwa remains on course to increase the number of its M&A bankers worldwide to 900 by March 2031, from about 640 currently, points out Ogino. It launched a four-member team focusing on cross-border transactions in April of last year, and has recently added two more to the group at the end of 2025.

Citigroup

Citigroup will further increase its investment banking team in Japan to capitalize on a record-breaking boom in M&A that it expects to reach new heights.

M&A deals involving Japanese companies are approaching $350 billion this year, the most since Bloomberg began collecting the data in 1998. Citigroup ranked 10th among advisers on such transactions and 11th for underwriting Japanese equity and equity-linked deals.

Japan vice chair Masuo Fukuda explained that the U.S. bank plans to expand its M&A division by about 30% by the first half of 2026, though declining to give a headcount figure to Bloomberg.

Bloomberg further reported that, according to Taiji Nagasaka, the division’s other co-head, Citigroup’s Japan investment banking business is expected to post its highest annual revenue since the firm severed ties with local brand Nikko in 2009.

The big picture

“We’re in an environment now where we can invest at double or triple the pace compared with before,” explained Goldman Sach’s Itoki in an interview with Bloomberg. “Supply and demand are aligned” between investors targeting Japan and companies seeking funding, he added. With regards to targeting mid-sized companies, Itoki explained that “in many cases, the quality of their business is high,” resulting in a big market share in Japan, “but they lack the resources necessary for further growth.”

As reported by Bloomberg, when asked about the Japan outlook in 2026, Kiyota of Citigroup Global Markets Japan said external factors and various pressures mean companies would “have no choice but to pursue corporate actions.”

He went on to observe that Citigroup isn’t the only global firm that’s rushing to strengthen investment banking operations in Japan. Goldman Sachs revamped its M&A advisory operations in December of last year. Kiyota also said to Bloomberg that Jefferies and UBS have also made key appointments.

Japan vice chair Fukuda of Citigroup pointed out that “the competition for talent is intensifying, requiring us to move fast with recruitment.” He told Bloomberg that he wanted to grow the investment banking team by 15% back in March of last year. The firm’s Japan securities unit has about 900 employees.

According to Bloomberg, Japanese companies have become more open to deals following corporate governance reforms that have made executives and directors more attuned to shareholders’ needs. Some firms are selling noncore assets while others are pursuing acquisitions to boost growth opportunities abroad. Hostile takeovers are no longer taboo here, and private equity and activist investors are playing a greater role in Japan.

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