[K-Value Up, Investors Speak] ① Pension → Asset Manager → Company... National Pension Service's 'Indirect Role Theory' Highlighted

"Agree with Government Policy Direction... Regret Lack of Enforceability"
"Pension Funds → Asset Managers → Companies" Expected to Indirectly Pressure Value-Up

The government's ambitious 'Corporate Value-Up Support Plan' announced to boost the stock market has fallen short of market expectations, highlighting the role of 'big players' such as the National Pension Service (NPS) in enhancing policy effectiveness. Going forward, pension funds like the NPS plan to revise their 'Stewardship Code' (behavioral guidelines) to support K-Value-Up initiatives. There are also expectations of follow-up announcements, such as including 'value-up investment' as a bonus point or selection criterion when choosing asset management firms entrusted with pension funds' money. This is an indirect value-up pressure strategy through institutional investors' 'Stewardship Code,' linking pension funds → asset managers → investee companies.

"No 'whip' to make companies run"... Disappointing 'Value-Up Measures' without Compulsory Force

According to the investment banking (IB) industry on the 29th, following the Financial Services Commission's announcement of the 'Corporate Value-Up Support Plan,' demands for strengthening institutional investors' 'Stewardship Code' poured in, especially from major activist funds. Kim Hyung-gyun, Head of Special Situations at Chapartners Asset Management (Managing Director), said, "Looking at this value-up plan, it is questionable whether voluntary compliance is possible solely through corporate autonomy and incentives." He added, "Many Korean companies face inheritance and gift tax issues, so structurally, there is often no incentive to raise stock prices. More compulsory measures are needed." Lee Sung-won, Vice President of Truston Asset Management, also said, "The key is how much companies will respond to government policies, and we expect the government to exert pressure through pension funds or asset managers and other institutions."

Utilizing 'Stewardship Code' by NPS and Others... Adding 'Investment in Companies with Excellent Corporate Value' to Asset Manager Selection Criteria

A senior official from an anonymous activist fund said, "In Japan, they publicly shamed companies that did not pursue value-up, but even so, some companies acted defiantly. In response, pension funds made asset managers move those companies." He elaborated, "When pension funds select asset managers to entrust money, they increase fees for managers who excel in value-up investments and foster competition, naturally encouraging value-up engagement activities." The official hinted, "The 'Stewardship Code' part was included in this plan, and although specific details were not disclosed, the NPS will soon make an announcement."

A senior official from another activist fund, B, also emphasized, "The role of the NPS is crucial for value-up. With shareholder meetings coming up next month, the pension fund must speak out against companies with low stock prices or broken governance." He stressed, "Ultimately, the government's role is to send signals and consistently and strongly show a stance of not standing by."

Recently, the NPS decided to select about three asset managers to discover domestic listed companies striving to enhance corporate value, which is a progressive attitude not seen before. The NPS is already exercising rights related to dividends to encourage investee companies to establish reasonable dividend policies. If dividends are not reasonably paid, they attempt dialogue, then designate the company as a confidential focus management company, and if no improvement follows, convert it to public disclosure. Previously, Namyang Dairy Products and Hyundai Green Food were subject to public disclosure. This has also led to shareholder proposals related to dividends.

This content was produced with the assistance of AI translation services.