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