Orix Corp., one of the nation’s most acquisitive financial firms, is in early talks to purchase a U.S. fund manager as part of efforts to double its assets under management, Chief Executive Officer Makoto Inoue said.
The potential target is valued at around ¥150 billion to ¥200 billion, has performed well in Asia and Latin America, and does not belong to any major banking group, Inoue said in an interview, without giving the name.
Orix is seeking at least 10 percent annual profit growth over the next three years, Inoue said. The leasing and finance firm, which bought Rabobank Groep’s Robeco Groep NV for 1.9 billion euros ($2 billion) in 2013, has been diversifying businesses and expanding overseas as a shrinking population in Japan limits domestic growth prospects.
“Consolidation of asset-management companies is a global trend now,” said Inoue, 62, who succeeded Orix co-founder Yoshihiko Miyauchi as CEO last June. “We’re currently the world’s 57th-largest asset management company with Robeco. To rise in the rankings, we need more acquisitions.”
Inoue said he wants to double assets under management as soon as possible. Through Robeco, Orix oversaw €246 billion of assets at the end of 2014.
The CEO said he targets net income of ¥300 billion in the year ending March 2018, up from a projected ¥215 billion for the year completed last month.
The pipeline of potential investments by the Tokyo-based company amounts to more than ¥1 trillion, Inoue said. That includes possible takeovers, private equity investments and purchases of aircraft, ships and other assets, he said.
Inoue said that Orix may bid for the rights to operate two airports in Osaka prefecture that are run by New Kansai International Airport Co.
Orix has been talking with a foreign airport operator to discuss an alliance before the May 22 deadline for submitting bids, Inoue said, without elaborating. It is planning a joint bid with France’s Vinci SA, the Nikkei newspaper reported April 10.
“We’ll be ruled out unless we team up with an airport operator because we don’t have any experience in that particular business,” he said.
Also in Osaka, Orix is discussing the possibility of pursuing a casino project with local companies, the CEO said. The Diet has yet to approve a bill to legalize casinos in the country.
Orix announced more than 30 investments in companies over the past three years, the most of any Japanese financial institution, in deals valued at more than $5 billion, according to data compiled by Bloomberg.