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When ORIX launched its Growth Strategy 2035 just over a year ago, some observers wondered whether the targets - a 15% return on equity and 1 trillion yen in net profit - were more of an aspiration than a plan. Twelve months on, the question is not whether ORIX can get there, but how fast.
"We are on track," says Hidetake Takahashi, President & CEO during a panel interview on the sidelines of the inaugural ORIX Investor Day in London, July 2026. "Portfolio optimization is being executed much faster than my original expectations. I would say, at this moment, it's on time."
The numbers back him up. Net income for FY2026 reached 447 billion yen, a record high for the third consecutive year and nearly halfway to the 2035 target. But the pace of structural change has been at least as notable as the financial performance. The 370 billion yen ($2.3 billion) sale of ORIX Bank stands as one of the clearest illustrations of how seriously the Group is pursuing portfolio transformation.
"ORIX Bank performs well within the banking industry," Mr. Takahashi explains, "but within our portfolio, its ROE is much lower than other businesses. We concluded that we were not the best owner. Fortunately, we identified a suitable owner in Daiwa Next Bank." The sale signals management’s willingness to act on the logic of its own strategy even when that means parting with established businesses.
To fifty percent and beyond
The task now falls substantially to CFO & Chief Strategy Officer Masataka Yamada. His mandate, as Mr. Takahashi is fond of describing it, makes him something closer to a ‘Chief Transformation Officer’. By Mr. Yamada's own assessment, only around 10% of ORIX's current portfolio fits the asset-light model that sits at the heart of the new strategy. Getting that proportion to 50% and more is the central challenge of the years ahead.
Mr. Yamada is candid about why the gap exists and, crucially, why it is an opportunity rather than a problem. "Until today, ORIX has been accumulating assets on its balance sheet with a relatively narrow range of risk-return profiles," he argues. "Investors' appetite is much wider. So, the key is to change the mindset: with the assumption that you don't have to book everything on the balance sheet, you can distribute out to investors across a much wider risk-return universe."
The practical effect is significant. Where ORIX might previously have accepted one in every 10 investment opportunities it unearthed, the new model could see it act on four or five. Assets would be brought in, improved, and then distributed to third-party funds, generating fee income alongside returns on the Group's own capital.
"Think of it this way," Mr. Yamada continues. "The origination capability is already there. It's simply a question of which opportunities we select - and now we can select many more of them."
Mr. Takahashi reinforces this, highlighting what makes ORIX genuinely distinctive. "ORIX is not only an originator," he says. "We are an operator and a value creator. We can add value to an asset and deliver that additional value to investors. That should attract interest in our strategy."
Not every business will fit neatly into the new model. Of those, some will remain on the balance sheet and ORIX will continue to manage and grow them. But the portfolio review currently underway across the Group could yield further significant moves, from disposals to new fund structures or strategic partnerships – depending on what the analysis reveals.
The bumpy road to a smoother destination
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Honesty about the transition's complexity is a theme that runs through Mr. Yamada's analysis. He acknowledges openly that profits are likely to be uneven in the years immediately ahead.
"The bumpiness comes from two things," he says. "We are shifting from a balance sheet-driven model to an asset-management model, and at the same time we are doing capital recycling. Once we have substantially completed the initial round of portfolio review, things should stabilize. That might be five or six years from now, but we are trying to get there as fast as possible."
The ultimate destination of substantially expanded assets under management combined with a higher ROE is one that Mr. Yamada believes will prove compelling to both existing and prospective investors. Some have historically kept their distance from ORIX due to what they see as a high level of corporate complexity. The new structure of three verticals, with dedicated COOs overseeing Japan & APAC, Infrastructure, and the USA & Europe, is designed to address precisely that concern.
There are also signs that the market perception of ORIX is already shifting. "In the past, investors valued ORIX on a price-to-book basis, as they would a bank," notes Mr. Yamada. "Now, given the growth potential of the business and the comparison with private equity and credit funds, they are beginning to value us on price-to-earnings. That is a significant change."
From direction to implementation
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While creating strategic clarity at the top, ORIX's leadership is equally focused on the internal dimension of the transformation. In January 2026, Mr. Takahashi created three vertical business units – Japan & APAC, Infrastructure, and USA & Europe, each led by a Chief Operating Officer - to simplify a structure that previously spanned 10 different divisions. The aim is to drive faster growth through more direct and accountable decision-making. “The rationale behind that transformation is to optimize resource allocation across the Group,” he says, “And it will allow each COO to allocate capital and talent properly within their business.”
The new structure is “based on the potential synergies we can create within each of the new verticals,” adds Mr. Yamada. For example, in the Japan & APAC Business Unit, one prime goal is to export Japan’s very developed business model for serving SME clients to the dozen or so markets ORIX serves throughout Asia Pacific.
Each new Business Unit has also been given a clear mandate to scale the asset management model across its operations.
Getting buy in for all of these changes is something Mr. Takahashi is personally committed to. Over the past 18 months, he has met with tens of thousands of employees at town halls, in-person meetings, and online sessions: “All of our employees are on the same page, in the same boat and see the same direction,” he says. "We have good momentum."
The case for being a diverse corporate group - and why it still holds
One of the most persistent questions ORIX faces from international investors is why it insists on business diversity at all? The answer, as both the CEO and CFO see it, is rooted in the logic of the business model itself - not merely in history or habit.
"We are not a portfolio manager," Mr. Takahashi says. "We are an operator. As long as we can control, manage, and create value from an asset, there is no reason to be confined to a single asset class." The value-creation cycle - originate, own, operate, improve, recycle - applies with equal validity to an aircraft, a hotel, a renewable energy facility, or a private equity stake. That makes the diversified group set-up a repeatable operating model.
ORIX's three core philosophies — independence, agility, and the conviction that change is the only constant — have underpinned its expansion across industries and continents for six decades. They are the same qualities, its leadership argues, that make the 2035 vision achievable. Private equity rivals may have longer track records in fund management, but none can replicate the origination depth, the client relationships spanning 400,000 Japanese SMEs, or the operational expertise accumulated across so many asset classes over so many decades.
"Private equity funds only visit a target when the target wants to sell," Mr. Takahashi observes. "ORIX has different products and services. We have many reasons to visit clients and potential targets and build relationships with them - relationships that could last not one year, but 10, 20, even 60 years."
The corporate transformation required by the new strategy is ambitious in scope and will take time to complete. Profits may fluctuate as capital is recycled and the portfolio is reshaped. But the direction is clear, the leadership team is in place, and both internal and external stakeholders are beginning to buy into the vision. ORIX is turning its promise of operating beyond the boundaries of conventional finance into reality.
