Daiwa Securities Group and Airborne Capital have announced they have agreed to enter into a capital and business alliance in the aircraft leasing sector.
The Japanese economy is gradually overcoming the prolonged stagnation following the bubble collapse and the disruptions caused by the COVID-19 pandemic. A favorable environment is emerging, where an investment-driven virtuous cycle can be expected across various sectors, marking a steady step towards a long-term growth trajectory, the companies said.
In recent years, alternative investments have been expanding, driven by the dual objectives of broadening revenue opportunities and stabilizing portfolio fluctuations. Among these alternative investments, aircraft leasing has gained significant attention. The global commercial aircraft market is anticipated to recover from the downturn caused by the COVID-19 pandemic, with annual passenger demand growth projected at 3-4%, indicating promising market potential. Aircraft leasing offers numerous benefits to airlines, including cost reduction at the time of introduction and flexible equipment replacement. As a result of strong leasing demand, it has emerged as a compelling investment product for investors.
In this environment, Daiwa Securities Group and Airborne Capital have agreed to enter into this Alliance with the aim of enhancing their ability to provide solutions that meet the needs of high-net-worth individuals and other clients in the wealth management business by leveraging the strengths and resources of both companies.
Daiwa Securities Group and Airborne Capital will leverage their respective strengths to launch a joint venture. Specifically, Daiwa Securities Group will contribute its extensive customer base, including high-net-worth individuals and corporate clients, while Airborne Capital will provide its specialised expertise in aircraft asset management to the joint venture. The joint venture company will offer comprehensive support to clients through the proposal of JOL (Japanese Operating Lease) products and the management of leasing services. Furthermore, the implementation of personnel exchanges, including secondments, is planned.
Currently, Airborne Capital is engaged in proposing JOL products, supporting customers in lease management, and operating aircraft investment funds. Going forward, all business related to JOL products will be consolidated into the joint venture under the Alliance.
Airborne Capital Japan, a Japanese subsidiary of Airborne Capital, will undergo a reorganisation into a corporation. Subsequently, Daiwa Securities Group will acquire common shares and non-voting preferred shares of the Target Company through a third-party allotment. Post-capital increase, the ownership ratio will be 50% for Daiwa Securities Group and 50% for Airborne Capital.
Akihiko Ogino, President and CEO of Daiwa Securities Group, said: “As our basic group management policy, we have set the goal of ‘Maximizing the value of customer assets.’ By deeply understanding our customers, we provide comprehensive consulting on total assets, focusing on portfolio proposals to pursue the best performance over the medium to long term, thereby contributing to maximizing customer asset value and corporate value. In the aircraft leasing sector, we offer products through introductions to major leasing companies in collaboration, targeting high-net-worth individuals and corporate clients. We have built a solid track record of collaboration with Airborne Capital, one of the world’s leading aircraft asset management companies. We believe that their business model, which provides tailored solutions to meet customer needs, supports our group’s ‘Customer-first Operations.’ Through this Alliance, we will develop joint ventures and offer a lineup of aircraft leasing products, which are highly demanded by ultra-high-net-worth individuals and other clients, as part of our total asset consulting solutions.
Ramki Sundaram, CEO of Airborne Capital, said: “We are an aircraft asset management specialist company headquartered in Ireland, with operations in seven locations worldwide, including Tokyo. We are very excited to launch this partnership with Daiwa Securities, whose deep market reach and innovative solutions make them an ideal partner to expand our existing business in Japan. This formalises our existing collaboration and aims to merge Daiwa Securities’ strength in delivering tailored high-value solutions with our aviation expertise, enabling the expanded offering of specialised aircraft leasing products in Japan, a key market in Airborne’s global growth strategy.
The impact of this alliance on the consolidated financial results of Daiwa Securities Group for the fiscal year ending March 2025 is expected to be minor at this point. However, we will continue to work towards enhancing corporate value in the medium to long term by promoting initiatives under the alliance.
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