Miry Capital Increases Stake in Stick Investment to Over 11%
Activist Fund Align Also Joins the Fray
Activist funds are expanding their influence over Stick Investment, a domestic private equity fund (PEF) operator. Following the additional acquisition of shares by the U.S. asset management firm Miry Capital, the activist fund Align Partners has also begun securing shares.
According to the investment banking (IB) industry on the 17th, Miry Capital purchased 543,850 shares of Stick Investment on the open market, raising its stake from 10.24% to 11.54%. Miry Capital is currently the second-largest shareholder of Stick Investment.
Stick Investment logo.
Through this additional purchase, Miry Capital has narrowed the gap with the largest shareholder, Chairman Do Yong-hwan of Stick Investment. Chairman Do's stake in Stick Investment currently stands at only 13.46%. Including shares held by family members and company executives, the total related-party stake amounts to just 19.45%.
Align, a leading domestic activist fund, has also started acquiring shares in Stick Investment. On the 28th of last month, Align newly acquired 2,769,478 shares of Stick Investment, securing a 6.64% stake.
It is known that Align has been purchasing Stick Investment shares for at least a year. Align believes that Stick Investment is undervalued compared to PEF operators listed overseas.
Both companies have specified their purpose of holding shares as "general investment." The purposes of shareholding are classified into three stages: "simple investment," "general investment," and "management participation." Among these, general investment refers to an investment type where active shareholder activities are conducted beyond basic rights such as voting rights and rights to subscribe to new shares, without affecting management control.
Miry Capital and Align do not appear to plan aggressive activities against Stick Investment in the immediate future. In Align's case, they attended Stick Investment's regular shareholders' meeting last month and quietly communicated their opinions.
However, Stick Investment cannot help but feel a significant burden. The combined stakes of Miry Capital and Align amount to 18.18%. Previously, the two companies also invested in the KOSDAQ-listed company Gabia.
Chairman Do, born in 1957, is also facing retirement, which adds to the pressure. If Chairman Do transfers his shares to the second generation or distributes them among partners, the division of shares could further weaken his control.
The market is particularly paying close attention to Align's involvement. Align has recently engaged in aggressive shareholder activism in the domestic capital market. It launched a shareholder proposal to introduce a cumulative voting system at Coway, mounting an offensive. In 2022, after acquiring some shares of SM Entertainment, Align pointed out that a major cause of SM Entertainment's undervaluation was unfair contracts with a specific individual’s company, triggering a management dispute.
An IB industry insider explained, "Stick Investment is the only PEF operator listed domestically, and Miry Capital and Align seem to have evaluated that it has the momentum for stock price growth, with assets under management exceeding 7 trillion won."
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