Align Partners Urges Stick Investment to Announce Next-Generation Succession Plan

(Seoul=Yonhap Infomax) Kyu Sun Lee – Activist fund Align Partners Asset Management (Align Partners) has sent an open letter to the board of Stick Investment Co., a leading South Korean private equity firm, calling for concrete measures to enhance corporate value, including the announcement of a next-generation succession plan.

Align Partners, which holds a 7.63% stake (3,180,499 shares) in Stick Investment, urged the board on the 24th to unveil a value-up plan reflecting six key proposals by January 19, 2026.

Since becoming a shareholder in February last year, Align Partners has held several private meetings with management but, citing a lack of meaningful progress, has now shifted to a public campaign.

Align Partners first pointed out that Stick Investment’s current share price is significantly undervalued relative to its fundamentals.

According to Align’s analysis, after deducting cash and investment assets (207.3 billion won, or approximately $155 million) from Stick Investment’s market capitalization (363 billion won, or about $271 million, based on outstanding shares), the platform value as a private equity manager stands at just 155.7 billion won ($116 million). Align argues this is unreasonably low given Stick’s 10.5 trillion won ($7.8 billion) in assets under management (AUM) and 26-year operating history.

In particular, Align criticized Stick’s capital efficiency, noting its return on equity (ROE) over the past 12 months was just 0.3%, far below industry norms.

To address this undervaluation and boost corporate value, Align proposed six core tasks:

• Announce a next-generation leadership succession plan
• Cancel all treasury shares except those reserved for employee compensation
• Revamp compensation structure to improve profit margins
• Adopt appropriate leverage at the management company level
• Disclose a mid- to long-term growth strategy
• Enhance board independence and expertise

On governance, Align highlighted the lack of a clear succession plan despite most key executives being over 60 years old. The fund cited global peers such as KKR and Apollo as examples, urging Stick to preemptively announce a next-generation leadership plan and introduce an equity-based compensation system to better align management and shareholder interests.

Regarding treasury stock policy, Align commented on Stick’s recent restricted stock unit (RSU) grant plan disclosed on the 21st, stating, “We support the increased use of equity compensation, but communication on specific details and objectives has been insufficient.” Align further demanded that all treasury shares not earmarked for future compensation be immediately canceled to eliminate governance uncertainties.

“The current downturn in Korea’s private equity industry is a crisis,” said Align CEO Chang Hwan Lee. “But now is a golden opportunity to address core issues, reform internal structures, and position for future growth.”

He added, “We urge Stick Investment’s board and management to thoroughly review our proposals and announce a comprehensive long-term growth strategy and compensation policy.”

kslee2@yna.co.kr

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