This article was published on the ChosunBiz MoneyMove (MM) site at 5:10 p.m. Nov. 24, 2025.
The activist fund Align Partners' campaign against domestic private equity firm STIC Investments (hereafter STIC) is growing stronger by the day. Align is reportedly likely to try to gain board seats at next March's annual shareholders meeting if STIC's management continues to refuse demands such as share buyback cancellations. If Align teams up with other funds that hold equity in STIC, the activist camp's voting stake (excluding treasury shares) is estimated to approach 30%.
According to the investment banking industry on the 24th, Align said it sent a public letter to STIC that day. It demanded not only full cancellation of treasury shares, which it has repeatedly emphasized, but also leadership succession to younger partners and a compensation system focused on performance fees rather than management fees. The demands are similar to previous ones but differ in stressing the "leadership succession" issue more.
STIC has effectively rejected Align's repeated demand to cancel all treasury shares. Instead, it said it would introduce a restricted stock unit (RSU) program and distribute shares to employees who deliver strong performance. Align responded that the problem was "not informing shareholders in detail who will receive them, why, and under what conditions," and reiterated, "Immediately cancel any remaining treasury shares other than those to be used for stock compensation."
STIC is avoiding a head-on confrontation with Align. Considering that Align is an activist fund but has never attempted a hostile M&A, STIC is reportedly not preparing defenses of its management rights. Companies in such situations typically hire law firms to defend management rights, but STIC has not made such preparations.
Industry sources say that as long as Align and STIC continue to run parallel courses, Align is likely to try to gain board seats at next March's annual shareholders meeting. It could be listed as an outside director to check management.
Align currently holds 7.63% of STIC's equity. STIC is not a listed company with assets of 2 trillion won or more, so it is not required to adopt cumulative voting (a system that gives shareholders as many votes as the number of directors to be elected per share and allows them to concentrate votes on particular candidates). Because directors are elected by simple majority voting, where a majority of votes is required, Align alone would find it difficult to gain board seats. Chairman Do Yong-hwan and related parties hold a total of 19.02% equity.
However, the story changes if it teams up with Mirii Capital, which holds 13.52%, and Petra Asset Management, which holds 5.09%. Mirii Capital has also demanded that STIC cancel treasury shares, aligning it with Align's position, and Petra Asset Management's CEO Yong Hwan-seok has ties to Align representative Lee Chang-hwan through activities such as the Korea Corporate Governance Forum.
If they form a "fund alliance," recalculating based on voting stake excluding treasury shares yields a total of 30.3%. That exceeds Chairman Do's voting stake (22%). The remaining 47.7% of voting stake is mostly held by individual shareholders, among whom are some former STIC employees.
Up to three outside director seats at STIC could become available at next year's annual shareholders meeting. The terms of former KDB Industrial Bank vice president Han Dae-woo and accountant Koo Seung-kwon expire in March. Combined with the vacancy created by the midterm resignation of outside director Heo Geun-nyeong, a total of three seats are open.
STIC Investments does not limit the number of outside directors in its articles of incorporation. However, it reportedly has a rule that "directors (inside and outside) may total up to nine." Assuming the four current inside directors (Chairman Do Yong-hwan, Vice Chairman Kwak Dong-gul, CEO Kang Shin-woo, and CEO Chae Jin-ho) remain, it would be possible to nominate three outside director candidates.
Among the four inside directors, Chairman Do Yong-hwan's term expires in March. He has been reappointed eight times and is likely to seek reappointment next year, which the activist camp may try to block.
In the end, where the remaining 48% of individual shareholders' votes go is expected to decide the outcome at next year's annual shareholders meeting. An IB industry official said, "The vote will shift depending on how attractive each side's proposals are and which way proxy advisory firms lean."