Daiwa Securities Deepends Partnership with Airborne Capital to Scale Aircraft Leasing Footprint

Daiwa Securities Group has taken a 10% equity stake in Airborne Capital, the Dublin-based lessor, to cement its position in the global aviation finance market. The definitive agreement deepens the strategic relationship established through a series of alliances between November 2024 and January 2026. By transitioning into a capital relationship, Daiwa secures a foundational role in Airborne’s governance, shifting the partnership toward a unified, long-term growth trajectory focused on high-margin alternative assets.

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The deal is structured to grant Daiwa immediate influence over Airborne’s strategic direction while providing a clear "path to control" or increased minority influence without an immediate full-scale acquisition. This four-pronged capital entry balances risk mitigation with future flexibility:

• Common Equity: Acquisition of a 10% voting interest from existing shareholders, effective immediately.
• Subordinated Debt: Subscription to subordinated notes issued by Airborne Capital, with payment scheduled for July 2026.
• Future Optionality: Secured warrants allowing Daiwa, at its discretion, to increase its voting interest to 20%.
• Governance Integration: The planned nomination of a Daiwa director to Airborne’s board.

These levers allow Daiwa to vertically integrate into Airborne’s management. The combination of subordinated debt and equity warrants provides a capital-efficient method to scale its commitment as the alliance matures, ensuring the firm can steer management decisions to align with its broader Wealth Management and Asset Management objectives.

Macroeconomic Rationale: The Shift to Real Assets

The investment aligns with a structural shift in the Japanese economy. As the nation emerges from a post-bubble/post-COVID low-growth phase, a "virtuous cycle" of investment and wage growth is being bolstered by aggressive capital efficiency and corporate governance reforms. In an environment of entrenched inflation, aircraft leasing has emerged as a premier "real asset" class, prized by Japanese institutional capital for its income stability and value retention.

Product Integration: Wealth Management and Institutional Offerings

The deepening of this alliance is designed to create a "cradle-to-grave" supply chain for aviation investment products, supporting Tokyo’s mandate to become a "leading asset management center." A key focus is the diversification of product lines for both ultra-high-net-worth (UHNW) and institutional segments.

The collaborative product suite includes:

• Daiwa Airborne: A joint venture operational since January 2025 (initially announced Nov 22, 2024) that delivers Japanese Operating Lease (JOL) solutions tailored for UHNW and corporate clients.
• MACH OE: Japan’s first open-ended aircraft fund. This vehicle, involving Daiwa Asset Management and Daiwa JPI Alternative Investments alongside Mercuria Investment, allows institutional investors to subscribe and redeem during the fund’s operating period—a milestone for Japanese liquidity in the sector.
• Warehousing Functions: Strategic partnerships designed to hold aircraft on-balance-sheet. This "warehousing" bridges the gap between asset acquisition and product "wrapping," ensuring a stable and attractive supply of JOL products for retail distribution.

This multi-tiered strategy maximizes group synergies by combining Daiwa’s massive distribution power with Airborne’s technical aviation expertise. By providing liquid institutional funds and bespoke JOL products, Daiwa is effectively capturing the entire spectrum of investor demand for alternative assets.

Financial Outlook and Corporate Statements

While the strategic implications are expansive, the immediate fiscal impact on Daiwa’s consolidated results for the fiscal year ending March 2027 is expected to be minor. The focus remains on medium- to long-term enhancement of corporate value through the expansion of the aircraft leasing footprint.

• Consolidated Impact (FY Ending March 2027): Anticipated to be minor at this stage.
• Strategic Goal: Maximizing customer asset value through portfolio diversification into real assets.
• Transparency: Significant developments or financial shifts stemming from the alliance will be disclosed promptly.

CEO Akihiko Ogino emphasized that the move is central to Daiwa’s management policy of "Maximizing the value of customer assets," noting that the firm will now provide "comprehensive consulting on total assets" by incorporating highly specialized aviation performance. Ramki Sundaram of Airborne Capital highlighted Japan as a "key market" in the firm’s global growth strategy, noting that the partnership provides a "strong foundation" to scale specialized aircraft products.

Daiwa Securities and Airborne Capital enter into business & capital allianceDaiwa Securities Group, its consolidated subsidiary Daiwa Securities, and Airborne Capital have agreed to enter into a capital and business…Japan FinTech ObserverNorbert Gehrke