1. First of all, how did you establish Align Partners, and what are your goals for Align Partners as a capital management company?
I was interested in investment even as a student. I worked on M&A and private equity funds for a long time and extensively researched Korean companies at Goldman Sachs and KKR. It was then that I realized that while there are many excellent public companies in Korea, there is a drastic gap between the price traded on the public market and the price at which private equity firms acquire the companies. This is due to corporate governance, as companies are run solely for the benefit of a few shareholders.
Fundamentally, investing is to buy good companies at a cheap cost and sell them at a high price, but the Private Equity Fund (PEF) market has become so competitive that you have to pay high prices to purchase expensive funds. So, if the corporate governance issues could be resolved, clients would be able to buy good stocks at lower costs. Moreover, as the number of people investing in stocks has tripled since COVID-19, more people have noticed such issues. Ultimately, I decided to buy good yet undervalued companies and address corporate governance issues in late 2020, which led me to establish Align Partners in early 2021.

2. I am certain that many experiences as a university student may have inspired you to become the CEO of a capital management firm. What are your most memorable university experiences?
The year I spent as an exchange student at the Singapore Management University was an immense help. When I was in Singapore, I followed other students and applied for a Goldman Sachs internship, and I was able to work in the Hong Kong and Seoul offices. I was also pleased that the classes in my major subjects were fascinating and also offered in English. You usually think of having fun when you become an exchange student, but I think I studied diligently that year.
I was especially impressed by a finance course on portfolio investment because it was an MBA-style class with cold questions and simulations. I also audited an IB Investment Banking course taught by an actual M&A advisor from an IB, and it was great to have the opportunity to learn more practical aspects in Singapore because more emphasis is put on the theories in courses in Korea. I also did a lot of networking, an experience which helped me get a job in an international finance company.

3. You must have studied the global market extensively before engaging in shareholder activism. As a budding market in terms of shareholder activism compared to the U.S., what are the appeals and challenges of the Korean market?
What is appealing about the Korean market is that shareholder activism has just begun here, so many excellent companies are offered at a low price, and there are many opportunities. There is enormous yet untapped potential, so there are many more attractive opportunities than in the U.S. If everyone is an activist investor, as in the case of the U.S., the cost would rise because it is already reflected in the price. On the other hand, there are challenges because companies in the U.S. or other countries have already accepted that disputing with activist funds is not always beneficial and because the legal system has been improved due to several precedents. In other words, there is a system that provides general stockholders with fair protection. As a result, when activist funds make proposals, the executives in foreign companies will respect them and listen to them, even if they may oppose the suggestions because they know it will eventually benefit them. However, that is not the case in Korea because people tend to be prejudiced and consider activist funds as speculators from the past. However, nowadays, a social consensus has been formed on the Korea discount issue, which has made it easier to work than in the past.

4. Since you invest in banks, I believe you would be interested in the Value-Up Program. How much expectation do you have for the valuation of the market, and what are your thoughts on the underlying causes and solutions to the Korea discount?
I think the Value-Up Program announced by the government is significant because it is the first time the South Korean government has officially acknowledged the Korea Discount problem. The essential causes behind the Korea discount are corporate governance issues in that the board of directors, which should be working for all shareholders, is working for a handful of major shareholders instead. For instance, if a company is acquired in the U.S., 100% is acquired at the same price, but Korea is the only country in the world where the majority shareholder’s stakes are bought with a considerable control premium, and the other stakes are abandoned. The Commercial Act guarantees the principle of equality of shareholders, but there is no measure to equip this in practice. This is a difficult challenge that should nevertheless be addressed. Korean conglomerates are structured as a pyramid through which one chairman controls a large group of companies using circular equity or holding companies, making it difficult to change such unreasonable circumstances. However, I know that in recent days, scholars and high-ranking officials have recognized this problem, which is a meaningful start. Now is the time to move on to the next step, such as the fiduciary duty of directors. I look forward to reforms that will change companies from kingdoms to republics so that citizens are rightfully treated as equals rather than being at the mercy of the kings.

5. Personally, I find that activist funds are making significant contributions to enhancing the efficiency of today’s stock market. What kind of investor would you like to be, and what contributions would you like to make to the capital market and society?
I fundamentally consider myself a value investor. I was fascinated by value investment at a young age and grew up reading many books about it. I do not pride myself on being someone with expertise in particular technologies or industries; I am merely a person with common sense. This is the basis for my investments, and I think this strategy has positive external effects in the end because we are changing companies for good and enhancing their value to earn money and generate returns for other general shareholders. This is why I prefer the activist strategy. Personally, it might have been an easier choice for me to work on PEFs, which I have been doing all my life. However, I think founding an activist fund was a better choice, considering how much I enjoy creating new things and the positive social impacts it might bring. We are particularly focusing on developing novel and good activist case studies. We are uploading everything we have done on a shareholder activism platform called Bside because we hope that others can emulate what we are doing. It would be meaningful and rewarding if the new concepts and methods we present as pioneers could contribute to the companies that used to disregard shareholders in the past, realizing that they are public companies.

6. Lastly, do you have any advice for Business School students who aspire to become investors?
I believe that independent thinking is important for investors. This also applies to your career path. People who study value investing or investing always have to think differently and should be able to find the future in places ignored by others. I believe career choices are the same. Rather than blindly following everyone else, I encourage you to have your own vision, read books and think deeply about it, and find and work in a field with potential that is just the right fit for you and presents you with multiple opportunities to learn.
While I do not know which field that would be, I would surely recommend shareholder activism since this is a budding field with plenty of opportunities. In my opinion, it would be an important topic in ten or fifteen years. When I first began working in PF, it was rare for graduates of Korean universities to work for international IBs. However, it has become a competitive option nowadays. Even if it does not concern this area, there are things in the present that could have potential as careers in the future. So, I hope you look into the future to prepare and make career decisions. Thank you.