Orix Corp., one of Japan's most acquisitive financial firms, is in early talks to purchase a U.S. fund manager as part of efforts to double its assets under management, CEO Makoto Inoue said.
The potential target is valued at around ¥150 billion ($1.26 billion) to ¥200 billion, has performed well in Asia and Latin America, and doesn't belong to any major banking group, Mr. Inoue said in an interview, without giving the name.
Orix is seeking at least 10% annual profit growth over the next three years, Mr. Inoue said. The leasing and finance firm, which bought Rabobank Groep's Robeco Groep for €1.9 billion ($2.1 billion) in 2013, has been diversifying businesses and expanding overseas as a shrinking population in Japan limits domestic growth prospects.
“Consolidation of asset management companies is a global trend now,” said Mr. Inoue, who succeeded Orix co-founder Yoshihiko Miyauchi as CEO in June 2014. “We're currently the world's 57th-largest asset management company with Robeco. To rise in the rankings, we need more acquisitions.”
Mr. Inoue said he wants to double assets under management as soon as possible. Through Robeco, Orix oversaw €246 billion of assets at the end of 2014.
The pipeline of potential investments by the Tokyo-based company amounts to more than ¥1 trillion yen, Mr. Inoue said. That includes possible takeovers, private equity investments and purchases of aircraft, ships and other assets, he said.
Orix announced more than 30 investments in companies over the past three years, the most of any Japanese financial institution, in deals valued at more than $5 billion, according to data compiled by Bloomberg.