When ORIX launched its Growth Strategy 2035 in May 2025, the ambition was clear: reach 1 trillion yen ($6.3 billion) in net profit and a 15% return on equity in ten years. One year on, with record financial results for FY2026 reported, the Group’s senior management is taking stock of what has been achieved -- and what still lies ahead.
At the center of that effort is Hidetake Takahashi, who was key to formulating the new strategy as Group COO, then becoming Group CEO in January 2026. His task is not simply to set targets but to transform how a 62-year-old institution thinks about capital, growth, and its own identity.
The headline numbers for the full-year results from April 1, 2025 to March 31, 2026 tell a strong story: net income grew to 447.3 billion yen – an increase of 27.2% year on year and a record high for the third consecutive year – ROE reached 10.4%, and the share price increased nearly 50%.
But the numbers, while encouraging, are not the whole story. The more significant shift is in how ORIX measures success. For most of its history, the Group has focused on growing absolute profit as it expanded from its origins in leasing into adjacent business areas and grew from a small Osaka firm into a global corporate group with assets of more than 18 trillion yen.
"Historically, we have focused mainly on the absolute profit growth of each business unit," Mr. Takahashi explains. "In the future, though, in order to achieve efficient capital utilization, we will manage ORIX with an emphasis on ROE in addition to conventional profit growth."
The Asset-Light Opportunity
The central mechanism for raising ROE is a shift toward what Mr. Takahashi calls an asset-light, fee-based business model. The logic is simple: balance sheet capital is finite, and fee-earning businesses that do not require it generate higher returns on equity by definition. The challenge is building them.
"Of course, it is much more straightforward to make money by using our balance sheet," he acknowledges. "However, balance sheet capital is always limited. And we have a strong pipeline of potential deals and high-quality assets we would like to add.”
One of the strengths of ORIX is its deal pipeline due to a deep and extensive network, especially in Japan. If the Group were to limit itself to its balance sheet capacity, it would not be able to do all the transactions it sees. Hence its intention to use more third-party capital and to work with external partners, to capture more of the opportunities in its pipeline.
The most concrete expression of this ambition so far is a $2.5 billion private equity fund launched in November 2025 in partnership with the Qatar Investment Authority (QIA). It is the first time ORIX has raised fund capital from an international third-party investor for domestic private equity investment in Japan -- and the first time QIA has invested in a Japan-focused domestic PE fund. ORIX is contributing 60% of the capital and providing services such as introductions to potential investment targets, post-investment monitoring, and advisory support for portfolio companies, with QIA providing the remaining 40%. The structure is a template for what the CEO wants to replicate across the Group.
"If you look at the big private capital groups and global asset managers, many of our peers have already taken this asset management strategy much further and into different asset classes," he says. "But given our strength in origination, especially when it comes to alternative assets, I believe that we can catch up."
Indeed, in Japan, the extensive customer network and hands-on approach in managing investee companies that ORIX has developed over decades, positions it as a serious domestic alternative to the big international PE firms that have flooded into Japan in recent years. “We are in a very strong position in the domestic PE market,” says Mr. Takahashi. “We have built a very good and reputable track record. Potential sellers see ORIX very differently from our global competitors.”
Meanwhile, the asset-light model is already established in international parts of the Group. Robeco, the Netherlands-based asset manager, and much of OCU, ORIX's US business, already operate on a fee-based model. In real estate, ORIX increasingly manages hotels and properties under management contracts rather than owning all the assets outright, and has launched ORIVA I, a 120 billion yen third-party property fund. But Mr. Takahashi sees the potential to go further: expanding this model further into its existing aircraft, ships, and renewable energy businesses, among other areas.
"We are just getting started in terms of turning more of our businesses into fee-earning asset management-type operations," he says. "We are working on raising third-party funds in each of those areas, to acquire assets which ORIX will manage but where we will not be supplying all the capital."
Rethinking Capital Recycling
Alongside the push for third-party capital, ORIX is also changing how it thinks about its existing portfolio. Capital recycling -- selling assets and reinvesting the proceeds -- has always been part of the ORIX playbook. What is changing are the criteria for selling.
In the past, ORIX typically divested assets when it could realize a capital gain. Going forward, the key question is whether an asset generates an adequate return on the capital it consumes, regardless of whether a sale produces a profit.
"If we have a business that makes a reasonable profit but only by using a large amount of capital, so that the return is low, then we will in future consider divesting such an asset and recycling the cash into a higher-return investment," Mr. Takahashi explains. "And this applies to all our businesses -- there are no sacred cows."
He is quick to add that this does not mean shrinking the balance sheet: "I expect continued steady expansion. It is just that our profits will grow more rapidly than our assets."
When evaluating whether to retain or divest a business, senior management will apply four criteria: current profitability; future growth potential; impact on the Group's credit rating; and strategic synergies with other ORIX businesses. The last point matters more than it might appear: some assets that are not highly profitable in isolation are foundational to the Group's broader capabilities.
Three Focus Areas, Two Business Models
The Growth Strategy 2035 organizes ORIX's activities around three focus areas -- Pathways, Growth, and Impact -- layered on top of two core business models: Alternative Investment & Operations, and Business Solutions.
Pathways targets the infrastructure of the future economy and new growth industries. ORIX's investment in businesses and technologies such as AI, DX, BPaaS, as well as new mobility services, and space-related businesses including satellites, sit here, as does recent acquisition I-NET, an IT services company focused on data centers in Japan.
Growth focuses on expanding proven business lines into new geographies, with Asia-Pacific a particular priority. ORIX has historically concentrated on equipment leasing and fleet management across the region; Mr. Takahashi sees significant room to expand into real estate, private equity investment, financial services, and other activities across those markets.
Impact covers businesses that address environmental and social challenges — including environmental and energy businesses like renewables developer Elawan and Japanese battery storage operations, as well as the recent acquisition of Nozoe Industry, a packaging materials wholesale and recycling company.
Meanwhile, the Business Solutions model -- helping clients solve problems through insurance, M&A introductions, and management succession support -- is equally important to ORIX’s future. "Not all of our activities are capital intensive in the first place," Mr. Takahashi notes. "All of this is basically fee-earning business with minimal use of assets -- so both the asset management strategy and the business solutions strategy can help us raise our ROE."
Restructuring for Execution
Strategy without execution is aspiration. To translate the new growth strategy into results, the CEO has reorganized ORIX's 10 historic business segments into three broader business units: Japan & APAC, USA & Europe, and Infrastructure. Each is now led by a Chief Operating Officer – a new title -- with clear accountability for capital allocation, financial discipline, and risk management, as well as broader responsibilities as key leaders of the Group as a whole.
"Last year we built a long-term vision and launched a new mid-term business plan," he says. "Going forward, we will be just focused on execution."
The reorganization is designed to break down the silos that can develop in a large, diversified Group. Mr. Takahashi is enthusiastic about the opportunity this creates: "If we do this successfully, I think we can not only justify our diversified business portfolio; we will also be able to keep adding new businesses and areas while exiting others. By continuously changing our portfolio, we can create a “black box” against competitors -- a business model that others cannot easily duplicate."
To speed up decision making, he has also streamlined his own span of control. Where his predecessor managed between 20 and 30 direct reports, Mr. Takahashi now has less than 10. To strengthen the corporate center, he brought in Masataka Yamada, the former head of investment banking at JPMorgan Securities Japan and a long-standing ORIX counterpart, as Group CFO and CSO.
Meanwhile, a new Digital Innovation Unit has been established to modernize internal processes and accelerate the adoption of digital tools and artificial intelligence across the Group.
Winning Over 37,000 Employees
Executing a strategy of this scale requires more than structural change. It requires buy-in from more than 37,000 employees spread across around 30 countries and regions -- people who have built careers within the existing model and may be uncertain about what the new one means for them.
Mr. Takahashi is making direct engagement a personal priority. Over the past year, he has held town hall meetings in every region of ORIX Group’s business worldwide, as well as speaking at training programs for employees at every level. He is also working with the compensation committee to align incentive structures with the new ROE-focused strategy for senior management.
In a world of rapid change accelerated by the increasing adoption of AI, his message to employees is consistent: adaptability: "The pace of change is accelerating and while that brings risks, it also creates opportunities, which people can take advantage of if they can remain adaptable and willing to learn," he says.
Going Beyond Finance
While the external environment is challenging – rising energy prices, uncertainty in US private credit markets, and shifting geopolitical dynamics – the CEO argues that this is precisely when strategic discipline matters most.
"We must not be swayed by short-term changes in our business environment," he says. "The more severe the environment, the more we can realize the full value of good management."
ORIX's diversified model provides a degree of natural resilience. And the Group's long track record of navigating cycles, from the global financial crisis to the COVID-19 pandemic, gives management confidence that the current strategy can withstand turbulence.
The peer group Mr. Takahashi has in mind – including leading alternative asset management firms and investment banks – already generate the 15% ROE that ORIX is targeting, and more.
But ORIX is not trying to become any one of them. Its combination of origination strength in Japan, operational depth across alternative assets, and a growing fee-based platform gives it a distinct position that goes beyond the traditional finance industry. And Mr. Takahashi believes this unique, difficult-to-replicate position can earn it a premium, not a discount, for its conglomerate structure.
One year into a 10-year journey, the foundations are in place. The harder work of building an asset management platform, deepening fee-based businesses, and fully realizing the potential of its diverse, global portfolio and talent is only just beginning.
