This article was posted on the ChosunBiz MoneyMove (MM) site at 5:19 p.m. on Jan. 16, 2026.
Private equity firms PACM Private Equity (PACM PE) and Welcome Capital, which invested in cosmetic medical device manufacturer WONTECH, have run into difficulty exiting their investments. They went all in on a stock price rise by acquiring 30 billion won worth of convertible bonds (CBs) in 2023 on a "no interest" basis, but with weak share performance they have remained in a loss position for more than two years.
On the 16th, investment banking industry sources said the valuation of WONTECH CBs held by PACM PE and Welcome Capital was about 25.6 billion won based on that day's closing price, a 14.2% decline from the invested principal. It has been roughly two years since they acquired the 30 billion won second-series WONTECH CBs in September 2023 through Ascent-Welcome New Technology Business Investment Fund.
PACM PE and Welcome Capital previously converted some of their held CBs into common stock in June last year. At that time they converted 5 billion won worth into shares at a conversion price of 9,436 won per share. Even if they sold the converted shares (529,885 shares) around the 10,000 won level, the remaining balance is still estimated to be in the double-digit percentage loss range.
Analysts say the firms' confidence in the investee became a liability. PACM PE, formerly Ascent Equity Partners, judged WONTECH's planned expansion of overseas sales networks as a major positive and, together with Welcome Capital, acquired the CBs without interest income safeguards. They made a bold bet by setting both the nominal interest rate and the yield to maturity at 0%.
Normally, investment firms set an interest income safety cushion of about 1%–3% when investing in CBs. This is to secure at least a minimal return if expected share price gains fall short and conversion to common stock becomes difficult. In particular, it is industry practice to set the yield to maturity.
At the time PACM PE viewed WONTECH's planned business expansion in North and South America as a major positive for use of funds, and staked everything on capital gains after conversion to common stock. They expected that if the number of countries selling its flagship radiofrequency (RF) cosmetic medical device Alligio increased, results would improve and the stock price would rise accordingly.
However, WONTECH's stock moved contrary to PACM PE's expectations. The stock, which traded above 13,000 won per share in September 2023, plunged at one point to around 4,000 won as performance faltered amid intensifying competition in the cosmetic medical device market. Sales, which were 115.6 billion won in 2023, fell slightly to 115.3 billion won in 2024, raising concerns about slowing growth.
It was also painful that the CB conversion price, which had been 13,480 won per share, fell to the floor of 9,436 won. Recently WONTECH adjusted the second-series CB conversion price down to the floor. Now, even if the stock falls further, lowering the conversion price will no longer create an opportunity for conversion into shares.
In addition, PACM PE and Welcome Capital fell into a "supply-demand trap." The number of shares to be issued due to the conversion price adjustment surged from the original roughly 2.22 million shares to 2,649,427 shares based on the outstanding balance. This volume, which exceeds 3% of the total outstanding shares, became a fear (overhang) that would flood the market as sell orders each time the stock rebounded, paradoxically creating a resistance level that caps the stock's upside.
A securities industry official said, "Including forgone interest income over the past two years (about 2.4 billion won assuming 4% per year), the investors' real loss burden is even greater," and added, "There is nothing PACM PE can do now except demand strong shareholder returns from WONTECH, seek block-trade demand, or exercise a put option against the company."