Activist fund Align Partners Asset Management signaled full-fledged shareholder activism targeting STIC Investments, the only listed private equity fund (PEF) manager in Korea.
According to the Financial Supervisory Service's electronic disclosure system on the 31st, Align changed the purpose of holding equity in STIC Investments from "general investment" to "influencing management control." Changing the purpose to influencing management control allows active involvement in overall management, including the appointment and dismissal of executives. The equity stake also increased by 0.99 percentage point(s) from 6.64% to a total of 7.63%.
Align is an activist fund that puts forward enhancing shareholder value and improving governance as its rationale. On Mar. 3, it disclosed a new acquisition of a 6.64% equity stake in STIC Investments. Recently, it also changed the holding purpose for other investment corporations, including SOLUM (8.04%), Gabia (9.03%), and Dentium (8.16%).
STIC Investments is a domestic PEF manager founded in 1999. The largest shareholder is Chairman Do Yong-hwan (about 19% including related parties), and the second-largest shareholder is the U.S.-based PEF Mirae Capital (13.38%). The combined equity stakes of investors such as Mirae Capital, Align Partners, and Petra Asset Management (5.09%) exceed 20%. That surpasses the stakes held by Chairman Do and related parties.
Align is joining forces with Mirae Capital and minority shareholders to demand the cancellation of 13.52% in treasury shares held by STIC Investments. If STIC Investments cancels all of its treasury shares, it could become difficult to defend management control.