Stick Investment Ownership to Change... Chairman Donghwan Do to Retire Before Shareholders' Meeting

Notified Key Members of His Decision to Step Down
Pursuing Sale of His 13% Stake

Donghwan Do, who led the domestic major private equity fund (PEF) management firm Stick Investment, has effectively made his retirement official. He is expected to step down before this year's first regular general shareholders' meeting and even dispose of his shares.

According to the investment banking (IB) industry on January 6, Chairman Do recently informed key members of his intention to retire. Chairman Do, who had previously hinted at stepping down during various events and internal meetings last year, has now formalized a more specific timeline. Born in 1957, Chairman Do has reportedly stated on several occasions that he would retire at the age of 70.

Since founding the independent investment firm Stick in 1996, Chairman Do expanded into venture investment and developed it into the current major domestic PEF management company, Stick Investment. The firm has become a trusted manager for major domestic institutional investors (LPs) such as the National Pension Service, the Teachers' Pension, and the Private School Teachers' Pension. The cumulative assets under management exceed 9 trillion won, with investments in more than 110 companies.

The intensifying attacks from activist investors, including Align Partners since last year, are also seen as influencing this decision. As of the end of last year, the combined stake of activist investors-Align Partners (7.63%), US-based Millie Capital (13.48%), and domestic Petra Asset Management (5.09%)-amounted to approximately 26.20%. This surpasses the combined 19.07% stake held by Chairman Do (13.46%) and other key executives and related parties.

Given that activist investors have publicly demanded the cancellation of treasury shares and a generational shift, it is unlikely that Chairman Do will be able to renew his directorship at the shareholders' meeting scheduled for March. Previously, Chairman Do attempted to resolve the situation by selling approximately 13% of treasury shares to secure a white knight, but the plan fell through. As a result, it is widely viewed that he had no other choice but to step down himself.

It is reported that not only is Chairman Do retiring, but he is also seeking to sell his shares. Some domestic companies and foreign asset managers have reportedly shown interest. An IB industry official said, "Chairman Do has mentioned changes in governance structure not only to external parties such as LPs but also to key internal members, emphasizing the need to develop future strategies," adding, "It seems that Stick Investment, the leading domestic PEF, is on the verge of significant change."

Once Chairman Do steps down, Stick Investment is expected to be led for the time being by Vice Chairman Kwak Donggeol, who has been with Chairman Do since the early days, aiming for a smooth transition in governance. Vice Chairman Kwak's term as an inside director runs until March 2027. The recent organizational restructuring is also seen as part of this plan. On January 2, Stick Investment elevated its growth capital and credit business units from divisions to departments, putting them on an equal footing with private equity (PE) and establishing them as major business pillars. This move is interpreted as an effort to decentralize power from Chairman Do and achieve balance in the portfolio.