Korean activist investors to routinize campaigns throughout year

South Korea’s activist investors are set to routinize campaigns all year long rather than launch fresh moves only before annual general meetings, investment banking industry sources said on Thursday.

Many domestic activist funds this year plan to continue existing campaigns launched in 2024, though some activist investors have decided to ease up on new actions, the sources said.

“Last year, many thought it would be difficult to talk to companies without taking surprise actions at regular shareholders’ meetings,” said a local activist fund source. “However, the government’s value-up program justified shareholder activism and allowed us to communicate easily with companies even though we did not take action at those meetings.”

Local activist investors usually launched campaigns before the general shareholder meeting period in pursuit of higher shareholder value, better corporate governance and other purposes.

Seoul-based Anda Asset Management Co. joined hands with global peers such as City of London Investment Management Co. and US-based Whitebox Advisors LLC to wage a proxy battle with Samsung C&T Corp. in February 2024, about a month before an annual shareholder meeting of the de facto holding company of South Korea’s top conglomerate Samsung Group.

Tcha Partners Asset Management Co. launched a proxy fight against Kumho Petrochemical Co., while Align Partners Capital Management Inc. initiated such a battle against JB Financial Group Co. before their annual general meetings.

TO STEP UP EXISTING CAMPAIGNS

Local activist investors aim to step up existing campaigns by maintaining their actions toward targeted companies throughout the year, sources said.

“In the past, we just had to defend against activist investors for the three months before general shareholder meetings,” said a source at a listed company. "Now, we need to stay alert throughout the year as many activist funds take offensive actions year round.”

Activist investors’ demands during the annual general meeting period in March may fail to draw interest, however, given that other shareholders usually ask companies to take steps for higher shareholder returns, better governance and more, sources said.

Write to Ji-Eun Ha at hazzys@hankyung.com
 
Jongwoo Cheon edited this aricle.