A+ Asset Strikes Back Against 'Activist' Align Partners: Will the Battle Become a Prolonged War?

Chairman Kwak’s Side Increases Holdings for a Month After Shareholders’ Meeting
Eldest and Second Sons Secure Loans Backed by Shares to Boost Stakes
Align Partners Responds to Insurance Industry’s Share Accumulation

In response to the activist campaign launched by Align Partners Asset Management since last year, Kwak Geun-ho, the largest shareholder and chairman of A+ Asset, and his affiliates have begun accumulating shares. This counteroffensive came immediately after the activist proposals were voted down at the shareholders’ meeting. The insurance industry is also increasing its stake, raising speculation about whether it will step in as Chairman Kwak’s “white knight.” In turn, Align Partners is reorganizing its position and preparing its response.

According to the Financial Supervisory Service’s electronic disclosure system on May 7, the stake in A+ Asset held by Chairman Kwak and 17 other related parties increased by 0.64% (143,272 shares) during April, reaching 29.13%. The stake held by these parties had fallen to 27.46% as of December last year after private equity fund operator Skylake participated in Align Partners’ tender offer, but rose slightly to 28.49% in January heading into the shareholders’ meeting. After the regular shareholders’ meeting on March 31, the related parties began purchasing additional shares.

Chairman Kwak’s Side: Purchasing Shares With Loans Secured by Existing Holdings... Family Transfers Shares Among Themselves

Specifically, Kwak’s eldest and second sons, Executive Director Kwak Tae-ik and Kwak Tae-min, increased their stakes. Executive Director Kwak bought 55,931 shares in a month, raising his stake from 2.25% to 2.5%. Kwak Tae-min purchased 119,782 shares during the same period, increasing his share from 2.81% to 3.34%. They borrowed loans with their existing shares as collateral and then used the proceeds to buy more shares. From mid-April to the end of the month, all shares purchased by Executive Director Kwak (worth 540 million won) and Kwak Tae-min (worth 490 million won) were acquired via loans secured by their stock holdings. Earlier in April, both had each secured a 700 million won stock-collateral loan using their previously held A+ Asset shares.

During this period, the Kwak family transferred shares among themselves through gifts or off-market transactions, concentrating shares in the hands of the second son and another relative, Shin Daye. Cha Young-sook, a relative of Chairman Kwak, gifted all 37,774 shares she owned, splitting them equally between Kwak Tae-min and Shin Daye. Another relative, Kwak Tae-jin, also sold all 40,668 shares in an off-market transaction, half each to the same two individuals. Kwak Tae-min and Shin Daye partially used loans (about 420 million won and 300 million won, respectively) from related parties to purchase these shares. This shows that Chairman Kwak or his relatives provided loans to help defend management rights by enabling family members to purchase shares.

Insurance Industry Poised to Become Chairman Kwak’s ‘White Knight’?

Insurance companies have also increased their stakes in A+ Asset. As of the end of last year, the combined holdings of four insurers—Hanwha Life Insurance (3%), Hanwha General Insurance (1.02%), DB Insurance (1%), and Heungkuk Life Insurance (0.49%)—stood at 5.51%. DB Insurance and Heungkuk Life Insurance both invested in the fourth quarter of last year, when Align Partners began its activist campaign and tender offer. Hanwha Life also increased its stake from 2.12% to 3% during the same period. A+ Asset is a general agency (GA) that specializes in distributing insurance products from various insurers, while insurers themselves act as manufacturers that design and supply the products. As the only publicly listed GA and a key sales channel for insurers, there is industry speculation that insurance companies may indeed become Chairman Kwak’s “white knight.”

Align Partners Regroups... Raises Issues Over Insurance Industry’s Concentrated Buying

Align Partners is also regrouping. Last month, 3% of A+ Asset shares held by Align Partners and its related overseas fund (Align Partners Korea Fund LP) were transferred via after-hours trading to Align Partners’ domestic corporate account. Since this overseas fund is managed by Align Partners but classified as a foreign investor, exercising shareholder rights—such as document verification, shareholder registry checks, and filing lawsuits—involves more complex procedures. By transferring the shares to a domestic entity, these procedures are streamlined, and the move is seen as preparation for potential legal action.

Align Partners has also announced that it will receive tips and information concerning the concentrated share purchases by insurance companies. On April 29, it set up the “Center for Tips and Suggestions to Enhance Shareholder Value” for interested parties in A+ Asset. Align Partners stated that the acquisition process by the insurance industry is a primary focus for such tips, stating, “Given that A+ Asset is a large GA with close partnerships with numerous insurance companies, it is important to ascertain the facts regarding whether there was any collaboration in the process of equity acquisition or exercise of voting rights, due to the business relationships involved.”

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