Align Partners and SM Entertainment: Korean Shareholder Activism Meets K-Pop (A)

For years, institutional investors had experienced very limited success in influencing the management of listed companies through shareholder activist campaigns in Korea. The common practice of circular ownership and public resentment toward foreign shareholder activists had created favorable conditions for those companies to fend off challenges. In 2022, a Korean private equity banker who turned stock investor sensed the winds of change in the equity market as the government wanted to encourage more foreign investments and the investor demographics shifted toward a younger generation in the post COVID-19 era. He zeroed in on a leading Korean entertainment company and launched a successful shareholder activist campaign against the company – the first time in history that a Korean public company accepted all the demands from a local shareholder.