Miri Capital closes in on STIC Investments chairman’s stake

Market watchers are now focused on how STIC might deploy its treasury stock amid shareholder tensions

Eun-Kyung Song 2

Shareholder activism

Miri Capital Management LLC has steadily raised its stake in STIC Investments Inc., narrowing the ownership gap with the firm’s founder and Chairman Do Yong-hwan -- a move that market watchers speculate could tip the balance of ownership in South Korea’s only listed private equity firm.

The Boston-based private equity firm said in a regulatory filing on Monday that it has increased its shareholding to 12.39% earlier this month in STIC Investments.

That compares with the 13.46% stake held by Chairman Do, the company’s largest shareholder, as of the end of March.

Between June 9 and 16, Miri purchased 78,000 shares in STIC Investments in the open market, paying between 10,198 and 10,865 won per share. The estimated total investment is around 800 million won ($600,000).

Align Partners, a Seoul-based activist fund, has also built a stake in STIC to 6.64%.

Combined, Miri Capital and Align Partners control 19.03% of the Korean private equity firm. That exceeds the 18.97% stake held by Do and his affiliates as of the end of 2024.

STIC Investments founder and Chairman Do Yong-hwan

Market watchers are now focused on how STIC might deploy its treasury shares to counter a possible challenge from the Miri Capital-Align Partners alliance.

STIC holds 13.54% of its own shares as treasury stock. While these shares carry no voting rights, they could become a swing factor in a proxy fight if transferred to a friendly third party. A retail shareholder coalition calls for the full cancellation of the treasury shares.

STIC has been active in small and medium-sized M&A deals.

Daekyung Oil & Transportation Co. (DK O&T), a domestic livestock by-product treatment firm, was one of STIC Investments’ recent portfolio successes, generating an internal rate of return of 22.1% for the fund backing the small-sized biofuel company.

MIRI CAPITAL'S INVESTMENTS IN KOREA

Meanwhile, Miri Capital has been steadily expanding its exposure to Korean equities, in addition to STIC Investments.

On Monday, it disclosed an increase in its stake in EUSU Holdings Co., which controls software development and logistics companies, to 14.86% as of June 12. It has accumulated the stock since 2022.

Miri Capital has also gradually raised its stake in Gabia Inc., a Kosdaq-listed software developer, to 15.90% as of June 16. Align Partners holds an 8.04 stake in the firm as of late March.

Write to Eun-Kyung Song at norae@hankyung.com

Yeonhee Kim edited this article.