Stick Investment, Under New Ownership, Accelerates Long-Delayed Generational Shift

With the change in its largest shareholder, Stick Investment, a first-generation domestic private equity fund (PEF) management company, is expected to accelerate a generational shift that has been relatively slow in the industry. Miry Capital is anticipated to shift the organizational focus toward managers born in the 1970s by simultaneously utilizing treasury stock cancellation and stock-based compensation (RSUs).

According to the investment banking (IB) industry on January 27, Miry Capital, which recently became the largest shareholder of Stick Investment, plans to take a more proactive approach to utilizing treasury shares than before. Stick Investment's corporate value enhancement plan, announced on January 19, included a provision to use about 1.25 million of its 5,633,228 treasury shares (13.52% of total shares) as RSUs. It is reported that Miry Capital intends to use an even greater volume of shares as a resource for RSUs in the future.

The initial plan is to allocate RSUs primarily to key managers, thereby driving a generational shift centered on operational staff, while also boosting total shareholder return (TSR) through additional treasury share purchases and cancellations.

Stick Investment has long been considered the slowest among domestic PEF managers in terms of generational transition. Until recently, key decisions were led by founder Chairman Do Yonghwan (born 1957), Vice Chairman Kwak Donggeol (born 1959), and Kang Shinwoo, Head of Risk Management and Strategy (born 1960). This contrasts with many other management companies that have already transitioned to, or are in the process of transitioning to, leadership centered on those born in the 1970s.

Miry Capital is expected to pursue a stable transition this year under the leadership of Vice Chairman Kwak, followed by a full-fledged generational shift starting next year. Partners born in the 1970s, including Chae Jin-ho, Head of the PE Division (born 1971), are expected to form the core of this new structure. By expanding RSUs, the company aims to increase equity participation among partners and operational managers, thereby strengthening both organizational loyalty and management stability.

Ensuring a stable generational shift is a core challenge facing Miry Capital. Limited partners (LPs) have expressed concerns that Miry Capital, an overseas investor pursuing a so-called 'consultavista' approach that combines activism and consulting, could undermine operational continuity and organizational stability after securing management control. Since Miry Capital is itself a management company, there is a possibility that it could eventually transfer management control of Stick Investment again when the fund is liquidated.

In response, Miry Capital appears to be using the expansion of RSUs as a strategy to quickly establish a partner-centered equity structure, thereby alleviating LPs' concerns.

Additionally, Miry Capital is reportedly considering transferring its current stake in Stick Investment from an existing emerging markets fund to an evergreen fund with no maturity date. Unlike typical private equity funds, which have a finite investment-recovery-liquidation cycle, evergreen funds have no or very long maturity, allowing for long-term holdings. Investors can make additional contributions or redemptions on a regular basis. Once established, the fund is structured to exist indefinitely, like an 'evergreen tree.'

An IB industry official stated, "If the proportion of partner equity participation increases, operational continuity can be maintained even if there are future changes in management control. If Miry Capital incorporates Stick Investment into an evergreen fund, it will be interpreted by the market as a signal of commitment to long-term joint growth rather than short-term gains."

원본보기 아이콘

© The Asia Business Daily(www.asiae.co.kr). All rights reserved.