(Bloomberg) -- Nomura Holdings Inc. is developing a global strategy to compete in the $1.6 trillion world of private credit, people with knowledge of the matter said.

The Japanese bank is looking to put down $1 billion from its own balance sheet over the next 18 months to participate on private lending deals, rivaling firms such as Blackstone Inc. and Ares Management Corp., said the people, who aren’t authorized to speak publicly. 

Nomura’s effort — which will involve lending to private equity-backed companies — is being led by Gordon Sweely, the New York-based global head of securitized products and private credit, the people said.

Though the bank occasionally participated on private credit deals before, it provided one of its first loans under the firm’s newly-established global private credit unit last Thursday, the people said. Teaming up with PGIM, Nomura provided a £110 million ($138 million) term loan and a £20 million working capital bridge facility to back HIG’s takeover of DX Group Plc.

A spokesperson for Nomura declined to comment.

Nomura is one of many investment banks trying to grab a slice of private credit, a market that has historically taken deals out of the banking industry. 

This week, Bloomberg News reported that Citigroup Inc. is in discussions to start a new direct-lending strategy by early January.

Meanwhile, JPMorgan Chase & Co. has set aside at least $10 billion to compete for deals with alternative lenders. Goldman Sachs Group Inc. and Morgan Stanley are raising money for private credit through their asset management units and Societe Generale SA and Wells Fargo & Co. have struck up partnerships with prominent credit funds.

How Private Credit Gives Banks a Run for Their Money: QuickTake

--With assistance from Gillian Tan and Francesca Veronesi.

©2023 Bloomberg L.P.