Signs of Trouble in IGIS Sale?…Why Has Former CEO Gapju Cho Returned?

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Gapju Cho, former head of the New Business Development Division at IGIS Asset Management, will return to the frontlines of management as CEO after five years. He is seen as taking on the role of a 'relief pitcher' amid a shaky relationship with the National Pension Service (NPS), a key limited partner (LP), and delays in the sale of the company to the foreign investment firm Hillhouse Investment.

According to the investment banking (IB) industry on April 28, IGIS is expected to hold a board meeting on this day to appoint Mr. Cho as the new CEO. The term will be one year. Considering that CEO terms usually last two to three years, this move is interpreted as an attempt to stabilize the organization over a short period.

Mr. Cho first joined IGIS in its early days in 2011 and served as CEO from 2015 to 2021. He is credited as a key figure, alongside the founder, in growing the firm into South Korea's largest real estate asset manager. He also holds a roughly 12% stake, making him a major shareholder.

His abrupt return comes as the sale of IGIS Asset Management faces delays. IGIS had selected Hillhouse as its preferred bidder at the end of last year and had started due diligence, but has not yet signed a stock purchase agreement (SPA). Disagreements over corporate valuation have intensified as relationships with major limited partners such as NPS have become strained, and controversy surrounding the possible acquisition by Chinese capital has also contributed to ongoing external noise.

The discord with NPS, in particular, is viewed as decisive. The conflict over Centerfield in Yeoksam-dong, Gangnam-gu, Seoul, is a prime example. Centerfield, an office complex redeveloped from the former Renaissance Hotel site, is valued at between 2 trillion and 4 trillion won. IGIS tried to sell Centerfield ahead of the fund’s maturity, but NPS and Shinsegae Property, both key LPs, opposed the sale, arguing it was done without beneficiary consultation. As a result, the sale was halted, and, in an unusual move, the asset manager was replaced. Industry observers say this goes beyond the loss of management rights over a single asset, suggesting that IGIS’s corporate value-which has relied heavily on NPS investments-has become unstable.

Given these circumstances, Mr. Cho, who led IGIS’s growth by leveraging relationships with existing LPs, is expected to step forward to repair the shaken LP relationships and stabilize the internal atmosphere unsettled by the prolonged sale process. Notably, he is said to have volunteered for this role. According to a source familiar with IGIS, "Mr. Cho is reportedly deeply saddened to see the company he built throughout his career being damaged and embroiled in various controversies," and, "With much of the personal legal risks, such as allegations of pursuing private interests, largely resolved, he appears to feel less burdened about returning."

Kopaju Cho, Incoming CEO of Aegis Asset Management

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Industry analysis suggests that this comeback is a move with little to lose for Mr. Cho. He had previously considered acquiring shares from Son Hwaja, the major shareholder and bereaved family of IGIS’s founder. However, due to disagreements over price and funding structure, this internal succession-style share transaction was not completed, and the family decided to look for an external buyer who could offer a higher price. Yet, as negotiations with Hillhouse stalled and concerns about corporate value erosion increased, the family ultimately turned to Mr. Cho for help in defending the sale price and stabilizing the organization.

This sends mixed signals to Hillhouse as well. Since a major shareholder and former potential acquirer has returned as CEO, it will be difficult to completely exclude Mr. Cho’s influence even after a sale. Especially for an asset manager like IGIS, LP networks and the cohesion of key personnel make up a significant part of its value. Even if Hillhouse completes the transaction, it is expected that Mr. Cho’s role will have to be acknowledged to some extent.

An IB industry official said, "Even if Hillhouse ultimately acquires IGIS, Mr. Cho will have bargaining power as someone essential for recovering LP trust and stabilizing operations. Conversely, if the sale falls through, it is also possible that discussions about a new governance structure centered around Mr. Cho could resurface."

However, some believe it is too early to conclude that the sale will not go through. Hillhouse is said to have continued sending various queries to IGIS in recent days to draft the SPA. IGIS also maintains that the sale process is progressing as scheduled.

An IGIS Asset Management representative stated, "The sale is proceeding smoothly according to schedule," and added, "We have recently received confirmation from the sale manager that detailed discussions are ongoing between the shareholders and Hillhouse, the preferred bidder, regarding the stock purchase agreement."

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