Mitsubishi HC Capital America, Inc., a specialty finance company, on Oct. 1 changed its name from Hitachi Capital America. The rebranding followed the birth of Mitsubishi HC Capital by the merger through the business integration between Mitsubishi UFJ Lease & Finance Company Limited and Hitachi Capital Corporation on April 1.
Mark Duncan, Mitsubishi HC Capital America Executive Vice President and Chief Operating Officer, explained that in many ways the company has not changed. But the merger has made Mitsubishi HC Capital America part of a larger organization with more assets and opportunities to partner. It also has given the company an opportunity to rebrand and look at new opportunities.
Mitsubishi HC Capital group is one of the largest global nonbank finance companies in terms of both its size and business domains, with nearly $86.4 billion of total assets and nearly 9,000 employees.
The renaming of Mitsubishi HC Capital America comes at a pivotal time as it steers its future course. The company is using its renaming as an opportunity to renew its commitment to its core commercial financing solutions and to expand into emerging markets. Having built a solid reputation specializing in financing for technology, manufacturing, transportation, energy efficiency and other core industries, the company is seeking to grow and diversify its portfolio.
To learn more about Mitsubishi HC Capital America, Equipment Finance Advisor recently talked with Duncan about the company and its future.
Equipment Finance Advisor:What are the key benefits of Hitachi Capital America becoming Mitsubishi HC Capital America.
Mark Duncan: Mitsubishi HC Capital America is the same business as when it was Hitachi Capital America. From an organizational perspective, it’s unchanged. However, as a part of the rebranding exercise, we started doing work with marketing firms and trying to better hone our internal image and external image. That was a major benefit.
We historically had been a part of the Hitachi ecosystem and with the merger of the parent entities – Hitachi Capital and MUL, and the birth of Mitsubishi HC Capital – it really widened our scope. We’re doing certain things in Hitachi Capital that MUL wasn’t doing and vice versa. These are great organizations that are very alike in terms of the strategic direction we’re going. We’re trying to do things in social innovation, with sustainability goals, etc.
When we started to learn more about each other, we really could see that benefit. It’s a broader capability set that we’re very excited to tap into. Also, in in terms of the culture set from Japan and the strategic positioning, it’s similar. That was exciting. We continue to run independently. In terms of the merger transaction, it was completed in April. Most of our effort has been trying to uncover those possibilities, where we have things that we’re doing in tangential markets, or things that we’re doing where each respective group could lend a hand. We’re now starting to identify some of these areas and cross pollinate.
Equipment Finance Advisor: Can you provide our readers with an overview of the key industries and financing products for the company?
Duncan: Mitsubishi HC Capital America is focused on a couple of areas. One area being on the working capital and senior secured financing side. In that area, we are offering inventory flooring, accounts receivable finance, ABL, and that product set. Moving then through to the inventory side, we’re offering vendor programs with OEM solutions and solutions that will support the VARs and others that are integrating the equipment or installed base for the end user.
We really look to offer the full continuum of financing products. Our sole purpose really is to help our client grow their businesses. If we can bundle solutions with our different product sets, that is our focus. In terms of industries, we focus on IT, healthcare, energy efficiency and transportation as major pillars. But we also are generalists in terms of manufacturing/industrial. We have operating platforms that cover the U.S. and Canada.
We try to target areas that are middle market versus investment grade or areas that are commoditized. These are areas that our know-how as a business partner is most valued with the client. We are looking for structured solutions where we can add value with our know-how. Also, our experience based on being a part of a big industrial, like Hitachi, and now the Mitsubishi framework. We see things from the lens of a business operator versus just a financial institution.
Equipment Finance Advisor: You have said the company is unique among financing providers because it is not siloed. What do you mean by that?
Duncan: Let me give you an example. A lot of organizations providing financing only have one product and they’re very siloed. For instance, you might talk to somebody that offers an asset-based loan, but in that discussion with the client, it becomes apparent that they actually need a broader solution set. We see some larger organizations are very siloed in terms of hearing the pain points of the client and putting together the solution. We orient ourselves where the three primary platform leaders, myself for Commercial Finance, Kirk Mann for Transportation and François Nantel for Canada, are constantly finding ways where we can internally partner and deliver a seamless solution where the client doesn’t have to jump through hoops to do business with us. We deliver meaningful things that are customized specifically for the client’s needs.
Equipment Finance Advisor: One of the focuses of the company is sustainability. Can you explain?
Duncan: That is a cornerstone really of how we’ve been approaching the market for years. I joined the business here over seven years ago, and we already were spending time in energy efficiency. We were working with end users, integrators and developers where they were installing LED lights and sensors. They were looking for novel ways to facilitate that deployment. We’ve been doing that for a while through our structured finance group. A couple of years ago, we started looking at medium-duty trucking spaces in an area that was attuned to some of these sustainability goals. We saw in the last mile there were a lot of companies that were coming to the fore with EV solutions. That’s very complicated in terms of getting those trucks put into the fleets, getting them built and creating the ecosystem around them to be an effective tool for someone that’s historically been using regular combustion engines to run their vehicles.
These are the types of things we look to where we’re trying to develop solutions. Inside of the EV space, we’ve done a lot of work over the last few years where we are trying to make it easy for the end user to enjoy the vehicle and facilitate the companies, the OEMs, that are trying to make the vehicle or the charging infrastructure. There is a lot of work to be done and it’s well-positioned for our value proposition. There aren’t a lot of established business models right now – it’s very early. That energy efficiency/EV space is an area we can differentiate ourselves.
Equipment Finance Advisor: The company has added 50 new hires since the pandemic had started. Are you still seeing growth in employment?
Duncan: We continue to grow both in the U.S. and Canada. With expansion, we have been very focused on operational excellence and driving efficiencies, but we still need to hire with the growth that we’ve had. We saw 20 percent growth last year, and I think we might see it again this year. We have about 500 employees across the U.S. and Canada. Another 10 percent growth of the employee base is definitely possible. It depends on the continued growth trajectory of our business.
Equipment Finance Advisor: You’ve indicated 2020 was an excellent year for the company. Why was 2020 strong for company?
Duncan: At the beginning of 2020, COVID-19 was just unrolling, unfolding. There was a lot of concern and a lot of unknown. And what we saw in the beginning of 2020 was a significant pullback of business related to the pandemic. Fortunately, our system was already up in the cloud. We were well-positioned to just shift to work from home. We were pleasantly surprised in terms of our ability to operate that way. I think that the challenge there though, was the rest of the market contracted in terms of new business activity, particularly in transportation.
At that stage, we were not sure of how things were going to unfold. Fast forward through 2020, we made big advancements in terms of our ability to have people work remotely. The focus was how do we get out to market? How do we really drive business in this kind of a virtual business environment. That created some challenges in terms of how salespeople meet with their prospects. The folks were able to adjust their styles and continue our vendor programs and our other businesses. As things improved a bit in some of those other pockets, we ended up having a pretty good year in COVID.
Year over year, we were able to expand more than 20 percent in terms of profitability and assets. Looking back, we were happy with how the business performed through the first phase of the crisis. Now we’re into the supply chain issues. We’re really trying to understand that aspect, to see where we can have a positive impact on driving some business.
Equipment Finance Advisor: Is there anything else you would like to touch on?
Duncan: Helping our clients grow their business and discover their pain points is a major thrust of ours. It’s almost our purpose of being. And we believe that with the products and capabilities that we’ve assembled inside of Mitsubishi HC Capital America, plus the access that we have across Hitachi and Mitsubishi – remember Hitachi still is a very major shareholder in the combined business – that we can really deliver unique solutions. And we continue leading the industry by helping our customers solve these complex problems with these solutions.