This article was displayed on the ChosunBiz MoneyMove (MM) site at 3:57 p.m. on Apr. 27, 2026.
Glenwood Credit, a private credit fund (PCF) manager that bet 144 billion won on K-beauty distribution corporations SILICON2, has begun procedures to recover its investment. It recently converted all the redeemable convertible shares (RCS) it acquired in Mar. last year into common shares that it "can sell at any time." Mark-to-market gains are estimated at about 55 billion won.
According to the investment banking (IB) industry on the 27th, Glenwood Credit on the 24th converted all 4,404,344 shares of SILICON2 held as RCS into common shares. It has been about a year since it participated in a paid-in capital increase promoted to raise operating funds, including for expanding SILICON2's global logistics network, and became a major shareholder (6.72% equity).
Glenwood Credit established Silk Special Purpose Investment Company in Mar. last year and invested 144 billion won in SILICON2. The per-share conversion price was set at 32,695 won per share, about a 4% premium to the then reference price of 31,558 won. The refixing (conversion price adjustment) clause was excluded, and only a redemption right after three years was included.
Analysts said Glenwood Credit has decided on an early recovery of its investment. Converting RCS to common shares means the principal repayment option (redemption right) is no longer needed, and once converted, the holdings can be sold on the market at any time. The company converted its entire RCS holdings into common shares.
It is thanks to SILICON2's stock rally. As the share price far exceeded the per-share conversion price set at the time of the investment, converting to stock and selling it in the market would yield a bigger capital gain than redemption with principal plus interest (an internal rate of return of 1.0% compounded annually over the investment period).
In the early stage of the investment last year, conditions were not favorable. The share price plunged as SILICON2's earnings fell right after the investment and turmoil hit BALAAN, a luxury platform that was one of the investment targets. In fact, within a month of the investment, the share price fell below the conversion price, posting a mark-to-market loss of nearly 20%.
The situation shifted as K-beauty's popularity in the global market continued steadily. Considered a global gateway for K-beauty brands, SILICON2 kept improving results, centered on Europe and the United States, even amid volatility such as Middle East–driven geopolitical risks, and the share price rebounded sharply to around 45,000 won.
The value of SILICON2 equity held by Glenwood Credit was tallied at 198.9 billion won based on the closing price that day (45,150 won). This comes as SILICON2's market capitalization, which was about 1.5 trillion won at the start of the investment, has recently jumped to the high-2 trillion won range. Glenwood Credit's mark-to-market gain on its SILICON2 investment came to about 54.9 billion won.
The market expects Glenwood Credit to begin a full-fledged on-exchange sale as soon as the common shares are listed next month. However, it is expected to sell sequentially while watching share price movements. It considered that dumping a massive block of more than 4.4 million shares on the market at once could significantly drive down the price.
An IB industry source said, "Glenwood Credit bet more than 140 billion won despite a somewhat unfavorable structure with no priority rights to dividends and no authority for conversion price adjustment (refixing) in case of a market price decline," adding, "It was a wager aimed solely at capital gains, and it has effectively paid off."
Meanwhile, SILICON2 said, "It is true that Glenwood Credit exercised conversion rights on all 4,404,344 RCS shares," adding, "Through the conversion, funds previously in the nature of a liability were converted into capital, eliminating cash outflow burdens from redemption, and as a result, both liquidity and financial stability are expected to improve."