Tokyo: Mitsubishi Corp and Mitsubishi UFJ Financial Group Inc,  will set up a joint Y100 billion ($1 billion) private equity fund next month in a bid to participate in a growing wave of buyout activity in Japan. 

The fund will be equally owned by Mitsubishi Corp, Japan's biggest trading company, and  Mitsubishi UFJ Securities Co Ltd, a unit of Mitsubishi UFJ Financial Group. This would be the  largest-ever investment fund of both the companies.

The fund will be mostly financed by Mitsubishi, Mitsubishi UFJ Securities and Bank of Tokyo-Mitsubishi UFJ, the core banking unit of MUFG.

It will target Japanese firms in need of capital for business integration, which are spining off non-core divisions or subsidiaries, or growing rapidly.

The fund will provide capital in various forms such as common stock, preferred stock, convertible bonds and subordinated debt.