Daiwa Securities and Airborne Capital enter into business & capital alliance

Daiwa Securities Group, its consolidated subsidiary Daiwa Securities, and Airborne Capital have agreed to enter into a capital and business alliance in the aircraft leasing sector.

Background and Purpose of the Alliance

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.

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.

Details of the Alliance

Business Alliance in the Aircraft Leasing Sector

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 specialized 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.

Overview of Capital Transactions

Airborne Capital Japan, a Japanese subsidiary of Airborne Capital, will undergo a reorganization into a corporation. Subsequently, Daiwa Securities Group will acquire common shares and non-voting preferred shares of Airborne Capital Japan through a third-party allotment. Post-capital increase, the ownership ratio will be 50% for Daiwa Securities Group and 50% for Airborne Capital.

Additionally, Airborne Capital Japan is expected to change its name to “Daiwa Airborne” as part of the joint venture development. This joint venture will serve as a foundation for further deepening the Alliance.

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