First-Generation Owner Remains Largest Shareholder with 60%... Private Equity Fund's Presence Grows

CEO Score, Survey on Major Shareholder Types of 2,597 Listed Companies in Korea

It was found that the first-generation owners still account for 60% of the largest shareholders among domestic listed companies. On the other hand, the proportion of second-generation owners as the largest shareholders has decreased, while the number of listed companies with private equity funds as the largest shareholders has more than doubled.

According to data released on the 25th by the Corporate Data Research Institute CEO Score, as of the end of last month, among 2,597 domestic listed companies excluding preferred stocks and Special Purpose Acquisition Companies (SPACs), 1,446 companies (55.7%) had first-generation founders as their largest shareholders. This is an increase of 3.2 percentage points from 52.5% in 2014. This is analyzed to be due to the steady increase in listed companies through recent startups or mergers and acquisitions (M&A).

The number of listed companies with second-generation owners as the largest shareholders was 666 (25.6%), a decrease of 5.0 percentage points compared to ten years ago. This is interpreted as the succession to the third and fourth generations following the passing of major companies' second-generation owners. In fact, the proportion of listed companies with third- and fourth-generation owners as the largest shareholders increased from 7.7% in 2014 to 10.0% this year.

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This survey highlighted the presence of private equity funds. The number of listed companies with private equity funds as the largest shareholders increased more than twofold from 21 in 2014 to 58 this year. Representative companies include Hanon Systems, Hanssem, Lotte Insurance, and Namyang Dairy Products.

Hanon Systems was acquired in 2015 by Han & Company Auto Holdings, a special purpose company (SPC) established by the private equity fund Han & Company, becoming the largest shareholder. Han & Company Auto Holdings is currently negotiating the sale of its stake to Hankook Tire, so the ownership of Hanon Systems may change soon.

Hanssem’s largest shareholder changed in 2022 when the founder and former honorary chairman Cho Chang-geol sold shares to the private equity fund IMM PE. Lotte Insurance also became the largest shareholder in 2019 after being acquired by the private equity fund JKL Partners.

Namyang Dairy Products became the largest shareholder in January this year when Han & Company’s SPC Han & Company No.19 acquired a 52.63% stake. During this process, former Namyang Dairy Products chairman Hong Won-sik engaged in a legal dispute with Han & Company.

A CEO Score official said, “As private equity fund investments continue to expand, changes are occurring in the largest shareholder structures of domestic listed companies,” adding, “The influence of private equity funds is expected to grow even further in the future.”