PE Investment and Concession
Information as of March 31, 2022.
PE Investment
Business
Private equity investment
| Assets (Share of total) | ¥315.0 billion (3%) |
|---|---|
| Profits (Share of total) | -¥0.4 billion (-0.1%) |
Overview
Investor That Combines the Strengths of a Fund and an Operating Company
ORIX’s PE investment business dates back to 1983, when we launched the venture capital firm ORIX Capital. We then expanded the scope of businesses in which we invested, only to weather a downturn in performance as a result of the financial crisis of 2008- 2009. We fully returned to private equity investment in the fiscal year ended March 2012. We emphasize a hands-on approach to improve all aspects of investee corporate value. This includes integrating with investee administration and providing sales support, assigning professional personnel to investees, and collaborating with the many ORIX Group divisions to develop new customers and expand sales channels.
Strengths
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Ability to add value with a hands-on approach that leverages synergies with ORIX Group’s sales network and products
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Flexibility about deal flow because ORIX invests its own capital
Challenges
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Exploring new investment schemes such as co-investment with operating companies
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Building economies of scale through investee roll-ups
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Expanding the scale of investments
Opportunities
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Increasing business succession needs and carve-outs at listed companies
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Increasing investment opportunities due to significant changes in industry structure from digitalization, and accelerating industry reorganization
Risks
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Potential for new investment to be impeded by rapidly rising acquisition prices
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Exits at lower prices than expected due to lack of due diligence and poor performance
Investee Company Overview
Leadership
Concession
Business
Operation of airports and water businesses
| Assets (Share of total) | ¥38.6 billion (0.3%) |
|---|---|
| Profits (Share of total) | -¥11.3 billion (-2%) |
Overview
Operate Public Facilities While Public Entities Retain Ownership
We started operating Kansai International Airport and Osaka International Airport (Itami Airport) in April 2016 as the first privately owned full-scale operation business for an airport in Japan, and have been operating Kobe Airport since April 2018. All three are operated by Kansai Airport Co., Ltd., established by a consortium centered on ORIX and VINCI Airports of France. In addition, we have been operating a wastewater treatment plant in Hamamatsu City, Shizuoka Prefecture since April 2018, and water businesses (water supply, industrial waterworks, and sewerage) in Miyagi Prefecture since April 2022. ORIX participates in the operating company, which was established with METAWATER Co., Ltd. and Veolia Jenets K.K. at its core.
Strengths
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Extensive expertise and experience in business operation
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Solid network of relationships with leading companies in and outside Japan
Challenges
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Creative ideas required by new forms of public-private partnerships
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Participating in overseas concession projects
Opportunities
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A potentially large concession market in Japan
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Infrastructure projects around the world
Risks
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Intensifying competition in domestic concession projects
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Change in policies regarding concession promotion and change in laws and regulations
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Negative effects such as decreased number of passengers due to infectious diseases
Concession System
A system in which private enterprises are responsible for the operation of public facilities such as airports, roads, and water supply and sewage systems, while public entities retain ownership.
