SEOUL - London-based hedge fund Palliser Capital says South Korean investors are increasingly backing shareholder activism, joining foreign-led efforts to reshape corporate governance at family-controlled conglomerates.
Palliser, a top-10 shareholder in LG Chem, is pushing the petrochemical giant to reduce its 80% stake in battery unit LG Energy Solution. The fund argues the current structure undervalues shareholder assets.
James Smith, Palliser’s chief investment officer and former Elliott Investment Management executive, said the environment in Korea has shifted dramatically. "A different environment now," Smith said, citing improved engagement from domestic investors.
For years, foreign activists faced resistance in Korea. Today, local shareholders are adopting similar tactics, driven by President Lee Jae Myung’s corporate reform agenda aimed at closing the "Korea discount"-a long-standing gap in stock valuations tied to low payouts and chaebol dominance.
Palliser previously succeeded in restructuring SK Hynix’s holding company in 2024. In Japan, Smith influenced governance at Tokyo Tatemono and Keisei Electric Railway.
Despite LG Chem’s November plan to cut its stake to 70% and maintain a 30% payout, Palliser called the move insufficient-urging share buybacks over limited dividend use.
The company declined to comment.