Capitalizing on our Solid Platform

to Promote our Growth Strategy p18

Kazuo Kojima, Corporate Executive Vice President

Special Feature

The Ability to Deliver

Since its establishment, ORIX has accumulated expertise and provided high

value-added services to its clients. Going forward, ORIX will realize high profit

growth by increasing the pace of “Finance + Services” and embracing growth

in emerging markets such as Asia.

Increase the Pace of “Finance + Services” p20

Embrace Growth in Emerging Markets such as Asia p24

Jim Thompson CEO of ORIX USA

on USA Business Expansion

p27Strategy 1

Strategy 2

Interview

Growth Strategy

17

Kazuo Kojima, Corporate Executive Vice President

Capitalizing on our Solid Platform

to Promote our Growth Strategy

ORIX has created a solid platform through providing a wide range

of products and services to SMEs and large corporate clients.

Going forward, we will accelerate the business model of incorpo-

rating “Finance + Services” into the business platform that we

have established, and at the same time expand business both in

Japan and throughout emerging markets such as Asia.

Kazuo Kojima

Director

Corporate Executive Vice President

Head, Domestic Sales Administrative Headquarters

Chairman, ORIX Rentec Corporation

Growth Strategy

18

Diversifying Client Needs Fosters New Business

ORIXhascreatedasolidplatformbycreatingandprovidinghighvalue-addedservicesbasedonourexpertisetoa

widerangeofdomesticandoverseasSMEsandlargecorporateclients.Weprovidesolutionsfortheissuesfacing

customersateachstep,forexample,venturecapitalinvestmentandfacilityprocurementservicesforstart-ups,real

estate–relatedassistanceforstoreexpansionandoverseasexpansionsupportforgrowingcompanies,andfundand

assetmanagementaswellasM&Aadvisoryandenvironmentalservicesformaturecompanies.

Anotherexampleofacomprehensiveservicethatwasdevelopedbycombiningneedsfromvariousbusinesses

wouldbetheenvironment-relatedbusiness.Thewasteconsultingandintermediationbusinessbeganin1998with

theideaofprovidingourend-of-leaseassetdisposalknow-howtoourcustomers.Then,asdemandforleasingand

rentalsincreasedinlinewithchangesinthetimesandenvironment,weexpandedourenvironment-relatedbusi-

nessesbycapitalizingonourindustrynetworkandknow-how,andweareutilizingthisaccumulatedexpertisein

suchactivitiesasthedevelopmentofeco-friendlyrealestate.

ThesamegoesforoperationsbothinJapanandoverseas.Wehaveestablishedasolidrevenuebasebyclosely

respondingtothedifferentregulations,culturesandneedsofeachcountryandregionforover40years.

Picking up on Precise Needs—the Key to Growth

Wehavebeenprovidingtheseservicestoourclientsasaone-stopservicesprovider.Furthermore,weareadding

personnelatourautomobileandrentaloperationsatlocationsthroughoutJapaninordertopreciselyidentifyclients’

diversifyingneedssowecanprovidenewservices.ORIXTrustandBankingstartedcorporatelendingin2009.The

smoothexpansionofbusinessatORIXTrust andBankinghas resulted ina loanbalanceof¥1.802 trillionand

approximately600corporateclients,providingtheGroupwithanewclienttier.WecanthenprovideotherGroup

servicestothisnewclienttier.Overseas,ORIXwillincreasethepaceoffindingvariousbusinessopportunitiesthat

arisefromcapitalizingonourplatformandeconomicdevelopment.

Inresponsetotheseclientdesiresthatspanawiderangeofregionsandbusinessareas,ORIXcreatesavirtuous

cyclebycombiningitsknow-how,creatinghighqualityservicesthatcreatenewmarkets,whichthencyclesbackto

furtherstrengthenourplatform.

Goingforward,wewillacceleratethebusinessmodelofincorporatingthesesophisticatedservicesintothebusi-

nessplatformthatwehavebuiltbothinJapanandoverseas,andatthesametimeexpandbusinessthroughout

emergingmarketssuchasAsiautilizing“Finance+Services.”

Environm

ent Related

Autom

obile Leasing

Precision M

easuringE

quipment R

ental

Real E

state Developm

ent

Business R

ehabilitationS

upport

Loan Servicing

Venture Capital

Life Insurance

M&

A A

dvisory

Embrace Growth in Emerging Markets such as Asia

Increase the Pace of “Finance + Services”

Broad client base ofdomestic and overseas

SMEs andlarge corporations

Implementation of a Growth Strategy Capitalizing on our Client Base

19

Increase the Pace of “Finance + Services”

Further enhance services and products that provide new value capitalizing

on sophisticated expertise

while grasping changes in

the business environment

and client needs.

Summary of the Strategy

Fromitsstartintheleasingbusiness,ORIXhasacquiredfinance-centeredexpertiseinbothassetvaluationandthe

provisionofasset-relatedservices.Theautomobile leasing,precisionmeasuringequipment rental, realestateand

aircraftoperationsintroducedinthisspecialfeaturedidnothavethecurrenthighlevelofexpertisefromthebeginning.

Rather,theoperationssteadilyevolvedthroughpersistentinnovation,graspingchangesinthebusinessenvironment

andclientneeds.

ORIX is striving to enhance its stable revenuebaseby implementing variousmeasures including the further

heighteningofitsexpertiseaswellasthediversificationandimprovementofitsservicesandproducts,inadditionto

theacquisitionofnewfunctionsthroughM&Aactivities.

Strategy 1

20

Decade/Market Demands

1970s Cost Reductions

1980sMaintenance

1990sOutsourcing

2000sConsulting

2010sEnvironment Considerations

Services • Finance leasing • Maintenanceservice,accidentresponse

• 24-hourcustomersupport

• Riskmanagementservice• Vehiclemanagement

system• Fuelmanagementsystem

• Logisticsconsulting• Proposalforintroducing

optimalvehicletypes

• EcoMobilityManagement

Customer Benefits • Costadvantage• Taxadvantage

• Laborsavingsinvehiclemanagementoperations

• Greateroperatingeffi-ciencyandsafetymea-suresthroughtotaloutsourcingofvehiclemanagementoperations

• Optimizevehicleusethroughconsultationonmanagementinitiativesrelatedtoautomobiles

• MeasurescombiningenvironmentalactivitieswithCSRpriorities

• Fosteringenvironmentalawareness,contributingtoalow-carbonsociety

Automobile Leasing and Precision Measuring Equipment Rental Operations: Evolving the service menu to solve client issues and aiming for business expansion in Asia

ORIX Auto, focusing on the automobile leasing business, and

ORIX Rentec, focusing on the precision measuring equipment

rental business, have approx. 870,000 vehicles* and approx.

780,000unitsofequipmentundermanagement,respectively.In

addition,ORIXhasrelationshipswithawiderangeofclientsfrom

SMEstolargeelectronicsmanufacturersandmajortransportation

companies.ORIX’sentranceintotheautomobileleasingbusiness

datesback38yearsto1973.Beforethen,ORIXhadaround3,000

automobilesunderdirectfinance leases,however theestablish-

mentofOrientAutoLeasingwasanopportunitytolaunchmainte-

nance leasesthat includedvehiclemaintenanceservices.Client

needshavegrownmorecomplexanddiversifiedovertheyearsto

encompass a range of issues such as environmental response,

safetymanagementandcompliance.ORIXcontinuestodifferenti-

ateitselfbyenhancingitsservicemenutoaddresstheseissues.

Assetvaluation isanessentialpart inprovidingautomobile

andprecisionmeasuringequipmentoperatingleases.ORIXen-

sures high profitability by controlling purchases and inventory

levelswhilemonitoringchangesinuserneeds,developmentof

newproductsandtrendsinthesecondarymarket.

ORIXisaimingforexpansionbyprovidingthesophisticated

servicesdevelopedinJapaninahybridbusinessthatmeetsthe

diversifyingneedsofclientsinthehighgrowthAsianregion.For

example,ORIXRentecenteredintoabusinessalliancewiththe

ChineseAcademyofSciencesandisacceleratingitsexpansion

in China. The ORIX Group provides automobile leases in 19

countries such as Australia, aiming for growth in line with an

increaseinmotorization.*Totalvolumeundermanagementincludingautomobileleasing,rental,carsharingand

automobilesforwhichORIXprovidestelematics.

TSUMURA & Co. has an over 100-year history in the

manufacture and sale of Kampo—Japanese traditional

herbal medicine. Currently, TSUMURA is the top manu-

facturer of prescription Kampo products with 129 prep-

arations. Around 80% of the plants that are the base

ingredients of Kampo come from China, with dry ex-

tracts prepared at plants in Japan and China (plants in

China can produce powdered extracts). During the China can produce powdered extracts). During the

manufacturing process, a large number of analytical facturing process, a large number of analytical

equipment such as liquid chromatographs is used in equipment such as liquid chromatographs is used in

quality control for component analysis of the medical quality control for component analysis of the medical

herbs and to check for residual agrichemicals.herbs and to check for residual agrichemicals.

We have had a relationship with ORIX Rentec since

2006. The pace of analytical equipment technological

innovation is fast, and the operating leases that set the

residual value allow us to control costs while using the

latest equipment. This is why we have gradually shifted

from equipment ownership to using leases, including

at our plants in China.

In addition, in June 2010 we started to gradually

shift the PCs, printers, copiers and projectors used by

all of our staff—around 3,200 pieces of equipment—

to rentals. Thanks to Rentec’s procurement capability, to rentals. Thanks to Rentec’s procurement capability,

once the changeover is completed in two years, the once the changeover is completed in two years, the

total cost associated with procuring PCs and other total cost associated with procuring PCs and other

equipment is expected to be reduced by around 20%.equipment is expected to be reduced by around 20%.

At TSUMURA, we have been focusing on reducing

system costs since 2004 by unifying system-related

information, budget and authorization, consolidating

the previous 137 servers into 12 servers by 2008.

Analysis equipment vital to quality control, and PCs

used in production control and process management,

are all part of the same system. It goes without saying

that our relationship with Rentec has led to cost reduc-

tions, but we also feel the benefit of receiving the same

service both at our Chinese plants and in Japan.

We are looking forward to new Rentec products

and services that will lead to improved management.

Reducing costs through ORIX Rentec leasing and rentals: TSUMURA & Co.

Upgrading Services in Step With the Times

21

Hideo Sato TSUMURA&Co.GeneralManager,InformationTechnologyDepartment

Real Estate Operations: Capitalizing on a Comprehensive Value Chain to Provide High Value-added Services

ORIXbeganrealestateoperationswiththeleasingofemployee

dormitories in1986, laterexpanding its rangeofoperations to

includethedevelopmentofcondominiums,officebuildingsand

commercial facilities. ORIX then developed its comprehensive

real estate value chain with the 1999 consolidation of the

operationofhotels, training facilitiesandgolfcourses thathad

beenspreadacross theGroup, inaddition tocooperationwith

therealestatefinanceandloanservicerbusinesses.

Inadditiontoincreasingthevalueofheldpropertiesthrougha

strong leasingcapabilityutilizingtheGroupsalesnetwork,ORIX

currently is focusingonbusinessesthatcapitalizeontheGroup

network and expertise. For example, in large-scale commercial

propertyinvestments,ORIXisabletoattractforeignjoint-investors,

serveasarrangerfortheinvestmentandmanagethebuildingafter

purchase. ORIX’s real estate development business is also

proactively responding to heightened environmental awareness

developing condominiums with individual solar power systems,

receiving high ratings for building environmental design from

objectiverankingssuchasCASBEEforlogisticcenters,commercial

facilities and office buildings, in addition to implementing car

sharingatitsfacilities.

IntheJapaneseinnandhotelrehabilitationbusiness,ORIX

retainsemployeesandworkswiththelocalstafftocreateanew

brand.Inaddition,ORIXisprovidingnewservicesthroughthe

2005establishmentofacompanythatoperatestherentaloffor-

chargeseniorhousingthatcombineslifestyle,nursingcareand

medical treatment for active seniors, looking ahead to the

diversifyingneedsofJapan’sagingsociety.

ORIX is providing high value-added services by increasing

theexpertiseandknow-howofeachbusinessandexpandingits

comprehensive value-chain that includes development, asset

managementandleasing.

SanctusMusashinosekimae,

acondominiumdevelopment

equippedwithindividualsolar

powergenerationsystemson

eachunit,allowingpower

generationandsalesofthe

surpluselectricity

Espoir Omotesando is a commercial building that

opened in 2006. Home of the major American

outfitter Polo Ralph Lauren’s flagship store in Japan,

the building is in a prime location within a five minute

walk from three stations in a popular downtown Tokyo

shopping district. A good building in the center of

Tokyo with a famous tenant, it is anticipated to

provide stable returns.

ORIX acquired the building through joint invest­

ment with overseas investors in November 2010.

ORIX received arrangement fees at the time of

purchase by serving as a debt arranger structuring a

non­recourse loan from domestic and overseas

financers, and expects to receive stable fees by

serving as asset manager after the purchase. This

project allowed ORIX to fully demonstrate two of its

strengths. The first strength is its network of overseas

investors. The Real Estate segment has a team that

introduces overseas investors and funds to Japanese

real estate, focusing on cultivating overseas investors,

primarily those from Asia, in addition to domestic

investors. Business opportunities widen by increasing

the number of partners from which to select. The

second strength is the capability to serve as an

arranger. In addition to the ability to discover a

project, ORIX can arrange a framework combining

finance and real estate investment expertise to put

together an excellent deal.

By jointly investing with multiple partners, ORIX

was able to be involved in a large­scale project with

only a small investment. Going forward, ORIX will

continue to capitalize on its real estate–related

service expertise to promote initiatives that generate

stable revenues.

Promoting initiatives that secure stable revenues: Espoir Omotesando

22

Espoir Omotesando

HomeofAmericanoutfitterPoloRalph

Lauren’sflagshipstoreinJapan

Aircraft Operations: Evolution from Direct Finance Leases to Operating Leases, Asset Management and Air Carrier Management

ORIX’saviationbusinessbeganwithaircraftleasingoperationsin

1978. Through the provision of direct finance leases, ORIX

gainedexperiencebothintheaircraftleasingmarketaswellas

theaircraftthemselves,latershiftingtooperatingleases,which

required ORIX to control the risk of aircraft value on its own.

ORIX Aviation Systems Limited provides asset management

services, drawing on the accumulated expertise from the

management,purchaseandsaleofaircraft,clientselectionand

thenegotiationoftermsandconditions.

Since2007,ORIXhasbeenparticipatinginthemanagement

ofAirAsiaX,afast-growinglow-costlong-haulcarrier,capitalizing

onitsknowledgeandexperienceintheaviationbusiness.

Demandforaircraftisgrowingduetotheeconomicgrowthof

emergingmarketsandtheindustryforecastsadoublingofglobal

passengerdemandoverthenext15years,primarilyinemerging

markets.Thisyear,ORIXworkedoncultivatingprospectivehigh-

growthmarkets,leasingtohigh-qualitylow-costcarriersinAsia,

andleadingairlinesinEurope,AsiaandOceania.Goingforward,

ORIXwillmaintainstablerevenuesbyaccelerating“Finance+

Services,” expanding aircraft leasing and asset management

whilepursuingjointinvestmentsinaircraft.

AircraftofAirAsiaX,alow-costlong-haulcarrier

ORIX Aviation Systems Limited (OAS) was founded in

Dublin, Ireland, in 1991 as an aircraft operating lease

provider. Currently, OAS has expanded its business to

include advisory services and asset management of

aircraft owned by financial institutions and investors

worldwide.

OAS has a total of 118 aircraft under management,

including aircraft owned by OAS and those owned by

other companies for which ORIX is contracted for as-

set management, with leases to 51 airlines worldwide.

OAS is able to demonstrate expertise in all stages of

aircraft transactions, including before, during and at

the end of leasing. Prior to leasing, OAS handles sales

mediation, leasing and sales contract negotiation,

advisory and funding arrangement. During the leas-

ing term, OAS provides contract management (lease

fee billing and crediting payments) and technical ad-

visory (maintenance checks, monitoring and inspec-

tions). At the end of the leasing term, in addition to a

maintenance check of returned aircraft, OAS handles

the sale of the aircraft and marketing for a new lease. the sale of the aircraft and marketing for a new lease.

Through these activities, OAS has accumulated

comprehensive expertise and know-how, differentiat-

ing itself by not only handling aircraft at every stage,

but also having the in-house ability to respond to

complex transactions that require technological, legal

and negotiation expertise. In addition to leasing its

own aircraft, OAS has acquired a unique position as

an aircraft investment asset manager by being the

only company in the industry to have a Standard and

Poor’s servicer rating (Above Average, the second

highest rating of a five rank rating system).

OAS aims to further enhance its expertise to pro-

vide higher value-added services that will increase

stable revenues.

Demonstrating sophisticated expertise in the aviation business: ORIX Aviation Systems Limited

23

2010 “Aerospace CEO of the Year”

Award Ceremony (Sponsored by OAS)

Aerospace CEO of the Year award

presentedtoWillieWalsh,CEO,Inter-

nationalAirlinesGroup(IAG)byDavid

Power,CEO,ORIXAviationSystems

Fromleft:WillieWalshDavidPower

Embrace Growth in Emerging

Markets such as Asia

Embrace high growth utilizing “Finance + Services” in the business

platform created in each country over 40 years

ChinaChinese Academy of Sciences

China Railway Materials Commercial Corporation

Shanghai International Holdings Co., Ltd.

PhilippinesMetropolitan Bank and Trust Company

TaiwanUni-President Enterprises Corporation

Sinyi Realty Inc.

South KoreaSBS Contents Hub

VietnamIndochina Capital Corporation

Saudi ArabiaSaudi Investment Bank

UAEMAJID AL FUTTAIM GROUP

SingaporeDevelopment Bank of Singapore LimitedUnited Overseas Bank LimitedUOL Group LimitedTan Chong International Limited

EgyptCommercial International Investment Company

National Bank of Egypt

ORIX regions and locations

Japan

Summary of the Strategy

Since establishing the overseas office in Hong Kong in 1971, ORIX has expanded its business globally, extending its

network to 26 countries and regions with 306 locations worldwide. Following the basic principle of “Localization and

Partnership”* in its overseas business, ORIX has responded to differences in regulations, culture and demand for

more than 40 years, forming the foundation of its current solid business platform.

The economic growth of emerging markets including Asia outshines that of Japan, the United States and Euro-

pean countries, and accordingly, customer demands are expected to become increasingly diverse. Going forward,

ORIX will embrace growth in emerging markets such as Asia, incorporating its accumulated “Finance + Services”

know-how to its wide-ranging overseas network for further expansion.* Development utilizing management with local business partners

Network and Main Business Partners in Asia

Strategy 2

24

Embracing Asia’s High Growth

AlongwitheconomicgrowthinemergingmarketssuchasAsia,

thebusinessenvironmentisonethatcanacceptmore-advanced

financialservicesthanbefore.ORIXisalreadydevelopingawide

range of businesses tied to local communities, such as non-

performingloaninvestmentinTaiwanandMalaysia,condominium

developmentinSingaporeandmicrofinanceinSriLanka.

Stemmingfrombusinesspartnerswishingtoestablishajoint

venturewithORIXtoexpandtheirbusiness,recentyearshave

seena growingnumber of newbusinessdevelopments.Addi-

tionally, ORIX is exploring alliances with new partners, private

equity investments andM&A transactions for business expan-

sioninareaswhereORIXisabletoshowitsstrength,including

automobilemaintenanceandretailbusinessareaswheremarket

expansionisanticipated.

ORIXaimstoembracehighgrowthinAsiabyincreasingthe

paceof“Finance+Services,”respondingtothebusinessenvi-

ronment and needs of each country and also enhancing its

globalnetworkwiththepolicyof“LocalizationandPartnership.”

IndonesiansubsidiaryPT.ORIXIndonesiaFinanceatajointpressconferenceinJakartawith

VFSInternationalAB,thefinancialservicearmofVolvoGroup,announcingtheirallianceto

provideacomprehensivefinanceprogramforVolvoGroupcustomersinAugust2010.

NassimParkResidences:AluxurycondominiumdevelopmentinSingaporejointlydeveloped

withUOLGroupLimited.

Lanka ORIX Leasing Company PLC (LOLC) is the

largest non-bank financial institution in Sri Lanka. In-

corporated in 1980, LOLC has grown from Sri Lanka’s

pioneering leasing provider to become a premier

financial solution provider with a range of services

including leasing, factoring, savings and fixed deposits, including leasing, factoring, savings and fixed deposits,

microfinance, collateralized lending, fleet managemicrofinance, collateralized lending, fleet manage-

ment, Islamic financing, insurance and stock brokering. ment, Islamic financing, insurance and stock brokering.

LOLC currently has 156 locations*.LOLC currently has 156 locations*.

Microfinance is the formal way of access to fiMicrofinance is the formal way of access to fi-

nance for grass roots level entrepreneurs who are

considered to be “unbankable” by many lending in-

stitutions. Through LOLC’s microfinancing arm, LOLC

Micro Credit Ltd. (LOMC), LOLC is poised to expand

further into the deep rural areas to be the private sec-

tor catalyst in promoting sustainable development in

Sri Lanka.

LOMC is the only private sector microfinance

institution in the country with foreign equity and is institution in the country with foreign equity and is

regulated by the Central Bank of Sri Lanka. With less regulated by the Central Bank of Sri Lanka. With less

than 3 years of operations as a standalone microfithan 3 years of operations as a standalone microfi-

nance institution, today LOMC has a rapidly growing nance institution, today LOMC has a rapidly growing

portfolio, an expanding branch network and an attrac-

tive portfolio at risk in the region.

With the success of microfinance in Sri Lanka and

a stakeholding in PRASAC, a microfinance institution

in Cambodia, LOMC is presently exploring microfi-

nance opportunities in the region.

*Includes LOMC microfinancing locations.

Offering financial services in Sri Lanka: Lanka ORIX Leasing Company PLC

25

Ishara C. NanayakkaraLankaORIXLeasingCompanyPLCDeputyChairman

Expansion of “Finance + Services” in the Burgeoning Chinese Market

China is a promising market attracting much global attention,

surpassingJapan’sGDP to ranksecond in theworld in2010.

ORIXisalsoactivelyexpandingbusinessinChinatoembraceits

highgrowth.

InDecember2009,ORIXestablishedORIX(China)Investment

inDalian,whichhasbecomeORIX’sChineseheadquarters. In

retrospect,ORIX’sbusinessinGreaterChinahadalreadystarted

with the establishment of its Hong Kong office in 1971. ORIX

established itsChineseheadquartersafter fullyassessingboth

the potential and risk involved, while carrying out business in

China such as investing in a fund establishedby theChinese

AcademyofSciencesandtakinga95%stakeintheestablish-

mentofaleasingcompanyinShanghai.

Sincethen,ORIXhasinvestedinDalianHaichangCorpora-

tionDevelopmentCo.,Ltd.(HaichangGroup),theprincipalcom-

panyoftheDalianHaichangGroupCo.,Ltd.,amajorcorporate

groupwithtourism,realestatedevelopmentandoperatingbusi-

nessesinDalian,andhassincebuiltagoodrelationshipwiththe

HaichangGroupasabusinesspartnerinChina.ORIX’srevenue

sourcesintheChinesemarketarediversifyingwiththepursuit

of“Finance+Services”ascanbeseenintheestablishmentof

the largest RMB-denominated fund with participation by a

JapanesecompanyinconjunctionwiththeUni-PresidentGroup,

Taiwan’slargestfoodmanufacturingandlogisticscompany,and

Shanghai International Group Asset Management Co., Ltd., a

Shanghaicitygovernment-relatedfinancialinstitution.

AlthoughfurthergrowthisanticipatedintheChinesemarket,

ORIXneedstoremaincautiousoftherisks involvedwithrapid

growth. ORIX will continue to seek expansion of its business

whilemonitoringbusinessrisksandcontrollingdownsideriskby

promotingdiversifiedinvestment.

Recent Business Developments in ChinaDecember 2009

EstablishedORIXChineseheadquartersinDalian

January 2010

InvestedinHaichangGroup

August 2010

EstablishedRMB-denominatedfundwithTaiwan’sUni-PresidentGroup

andShanghaiInternationalGroupAssetManagementCo.,Ltd.

December 2010

StartedChineseHeadquartersBuildingProjectinDalian

May 2011

Acquiredanapproximately14.5%stake inChinaWaterAffairsGroup

Limited(ListedontheHongKongStockExchange),acompanydevel-

opingthewaterandsewagebusinessinmainlandChina

The China Team was established in the Global Busi-

ness and Alternative Investment Headquarters in May

2010. Primarily comprised of young Chinese staff, the

team travels back and forth between Japan and Chi-

na exploring business opportunities. The hallmark of

this team is that its members are familiar with local

business practices and regulations in working togeth-

er with locals and use their understanding of ORIX’s

organization and business strategies. This allows for

prompt and flexible decision-making, a great advan-

tage in promoting business in the rapidly growing and

quickly developing mainland China market.

ORIX’s full-scale business expansion in mainland

China began in recent years. The current members of

the China Team played a pivotal role in conducting

research to change from ORIX’s previous method of

approaching the mainland through Hong Kong. After

concluding that the timing is right to take action, the

China Team has worked closely with top manage-

ment to encourage prompt action, leading to the es-

tablishment of the Chinese Headquarters and

investment in Haichang Group.

Although ORIX has a basic principle of working

with local partners and local management, placing

the China Team—comprised of Chinese staff—in the

Tokyo headquarters allows for the local team and To-

kyo headquarters to operate as a single team to ex-

pand the business. The China Team also has

locations in Beijing and Hong Kong where it seeks

investment opportunities and partners.

Each location will have its own role to play as the

China Team further accelerates collaboration with

domestic sales departments by supporting Japanese

companies to expand their businesses in China while

strengthening cooperation with the Chinese head-

quarters in Dalian.

Global Business and Alternative Investment Headquarters, China Business Division, China Team

26

China Team Members

Fromleft:

SenKin

TongtongWu

HaoLi(Manager)

OnanCho(BeijingOffice)

SeiChin

ChiharuHirano

ZichuanCheng

Jim Thompson CEO of ORIX USA on USA Business Expansion

Jim ThompsonPresident and CEO of ORIX USA Corporation

OUC is active in a wide range of business areas in the United States. How did OUC grow to include such a di-verse range of businesses?ThecoreelementofourstrategyatOUCisobtainingspecialized

expertise in various areas. Wedo this by addingnewexpertise

from outside OUC and by building on existing expertise by ex-

panding into new businesses and new geographic areas. In fi-

nance, the lifecycleofan ideaoraconceptcanbe fairlyshort,

especiallyintheUnitedStates.It’ssimplynotpossibletostayina

businessforlongperiodsoftimewithoutbeingsubjectedtofluc-

tuationsinpopularityandprofitability.

AtOUC,weareabletocompletelyabandonareasthathave

becomelessattractiveandfocusonfindingnewmore-attractive

areas.Comparedto1990,OUCwasaverydifferentbusinessin

2000,anditisverydifferenttodaythanitwas10yearsago.

What is it about OUC that has allowed this growth and evolution?Wetrytorecruitgoodtalent.Weliketorecruitpeoplewithideas,

peoplewhothinkofwhatwedoasanartasopposedtoascience.

Ifyoufindtherightpeopleandhavegoodideas,youcanusually

findsomepathtosuccess.Ithinkwe’vealwaysbeenfortunatein

thepeoplethatwe’vebeenabletobringtoORIXandattributethis

goodfortunetotheuniquecorporateculturethatwehave,which

isdistinguishedbyalackofrigidityinorganization.

However,evenwithgoodideas,theexecutiondependsupon

market variables and management must keep a range of alter-

nativesinview.

MyhistorywithORIX isactuallyaby-productof this.Twenty

yearsagoIapproachedORIXwithanewideathatdidn’texistinthe

UnitedStates(commercialrealestatesecuritization)andcertainlywas

newandunfamiliartoORIX.I,too,cametoORIXtodosomethingnew.

What are some examples of how OUC has changed the business mix over the years?Currently,theleverageratioofthecompanyislowerandlikelyto

remainlowerforsomeperiodoftime.Thisiscausingustoshift

our thinkingaboutwhatweneedtodoandhowtoallocateour

management resources.Weare in themidst of identifyingnew

areastoexpandtheOUCbusiness.Someoftheseareaswilldraw

onexpertisethatwepresentlyhave,suchasassetmanagement,

investmentbankingorcertaintypesoffinance.

A good example would be commercial mortgage-backed

securities, which we started with back in the early 1990s. The

business was tremendously profitable through the 90s and the

earlypartofthenewmillennium.However,asthebusinessbegan

tomatureandtheearlystagesofthebubblebegantodevelopin

theUnitedStates,wescaledbackthebusinessin2003andfound

otherthingstodo.

WeacquiredacontrollingstakeinHoulihanLokeyin2006,on

thethesisthatitwasabalancedbusinessmodelwithitsM&Aand

restructuring businesses. Houlihan Lokey was a star performer

throughoutthefinancialcrisisandnowthattherestructuringbusiness

isslowingdown,theM&Abusinessispickingbackup.Theselastfew

yearshavedemonstratedjusthowbalancedofabusinessitis.

Likewise,ORIXpurchasedREDCapitalGroupinMay2010,a

realestateloanstructuringandservicingcompanythatprovides

finance for multifamily and senior living projects in the United

States.Wealsoenteredintotheassetmanagementbusinesswith

the acquisition of the fund management company Mariner

Operations in the United States

Evolving “Finance + Services” by Focusing on the Diversification of Customer NeedsORIXUSACorporation(OUC)isanORIXGroupcompany

providingproprietaryinvestments,investmentbankingser-

vicesandassetmanagementintheUnitedStates.Overthe

last20years,OUChasexpandedbothitsrangeofproducts

andclientbase.Attheforefrontof“Finance+Services,”OUC

hasexpandeditsbusinesswiththeacquisitionsof invest-

mentbankingboutiqueHoulihanLokey,loanservicerRED

CapitalandfundmanagementcompanyMarinerInvestment.

OUCcontinuestogrowandadaptitsbusinessestorespond

totheever-changingmarket,acharacteristicthatallowedit

toremainprofitableevenduringthefinancialcrisis.

OUCCEOJimThompsonsatdowntotalkwithusabout

howOUCwasabletocreatesuchadiversifiedportfolioand

itsdirectionsforthefuture.

Interview

27

Mariner is an SEC-registered investment advisor founded in 1992 with

166 employees and, in conjunction with its affiliated advisers, manages

approximately $11.7 billion (US)*1 of assets placing Mariner in the top

5%*2 of hedge fund managers worldwide. Mariner’s current investment

services and product offerings include several direct and affiliated single

and multi-strategy hedge funds, funds of funds and other alternative

investments. Mariner is headquartered in Harrison, New York with addi-

tional offices in New York City, Boston, London and Tokyo.

Mariner’s asset management business includes reporting, legal, com-

pliance, capital raising and investor relations functions, as well as staff

that support both Mariner and affiliated managers. These services are a

competitive advantage for Mariner, attracting trading and fund manage-

ment professionals with existing funds as well as newly conceived funds

into an affiliation.

*1 Assets under management as of January 1, 2011

*2 Source: Houlihan Lokey Howard & Zukin

Mariner Investment Group

InvestmentGroupLLC(bytakingamajorityinterestintheholding

companyMIGHoldings,LLC).

The addition of these fee-based businesses has had a

pronouncedimpactonourearningscompositioninashortperiod

oftime.Inadditiontoexpandingourcommission-basedbusiness

as a result of these investments, we expect to achieve new

synergieswithourexistingservicingbusiness,toobtainvaluable

know-howintherealestateloanstructuring,servicingandasset

managementbusinessandtogainaccesstoanexpandedclient

networkintheUnitedStates.

What other areas are you looking to expand the business?Wearealsolookingtoexpandourbusinessgeographically.Whenwe

expand,itisintoareaswherewehaveahistory,abackgroundand

knowledge,butweneedtotakeintoaccounttheadditionalriskof

operatinginanewgeographicregion.

Also,wearestudyingnewsectorsoftheeconomytoreeducate

ourselvesinamuchbroadercontextastohowthingswork.We

arelookingathowcapitalisraised,howitisutilizedandhowvalue

realizationoccurswith the ideaofaddressingnew industries to

see if we can identify new niche areas where we can create

specialization and then whether through acquisition or through

organicgrowthopenupareasfornewgrowth.

I thinkthat it iswonderful thatORIXhasthis longcorporate

tradition of seeking expansion with innovative products and

expansionintonewgeographicareas.ManyofORIX’ssuccessful

businesseswereatsomepointintimejustanidea.Aslongaswe

canfindnewideas,wecanfindwaystogrow.Wecanstillfindnew

ideas.Wearelimitedonlybyourimaginationandouringenuity.

Business Lineup for a Changing Market

Mariner’s Competitive Strengths in Platform Strategy

Fund Raising• Dedicated sales team

• Deep network with institutional investors

• Access to retail

Legal & Compliance• SEC-registered firm

• Robust policies & procedures

• Keep abreast of regulatory matters

Finance & Accounting• Accurate trade processing

• Rigid fund administration

• Transparency – Fund audit

Risk Management• Dedicated and robust systems

• Stress testing for hypothetical scenarios

Fully Integrated Fund Platform

28

ORIX Capital MarketsCommercial Real Estate Finance

Asset Business

ORIX Corporate CapitalCorporate Finance

ORIX Municipal FinanceMunicipal Investment

Houlihan Lokey Howard & ZukinInvestment Banking & Advisory

Fee Business

RED Capital GroupMultifamily & Healthcare Loan Servicing

Mariner Investment GroupAsset Management

ORIX USA Corporation