COVER STORY From Tiger to Align, shareholder activism takes root in Korea

When a U.S. fund began challenging SK Telecom in 1999, corporate Korea was only beginning to learn what shareholder activism looked like. The country had only recently emerged from the depths of the Asian financial crisis, and its capital markets were opening rapidly to foreign investors.

Tiger Management built a 6.6 percent stake in the country's largest wireless carrier and pressed for changes, including stronger external oversight and a greater say in how the company was run.

The Chey family, one of Korea's chaebol dynasties and the controlling family behind SK Group, spent about 2 trillion won defending its grip on the group. Within months, Tiger had reaped about 630 billion won ($463.6 million) from selling its stake.

The idea that an outside investor could buy into a major Korean company and publicly demand change was still novel — and deeply unsettling to many companies. Tiger's windfall only deepened suspicions that foreign funds were enriching themselves at Korea's expense.

That wariness persisted. Sovereign challenged SK Corp. in 2003. Carl Icahn took on KT&G in 2006. Elliott Management clashed with Samsung C&T in 2015. Activist investors, particularly foreign ones, were often portrayed in Korea as corporate raiders.

In 2004, the Kyunghyang Shinmun described them as "ruthless corporate raiders." Three years later, the Dong-A Ilbo warned that Korean firms stood "naked before hostile takeovers."

By the late 2010s, however, the mood was beginning to change.

A new generation of domestic activists, including KCGI and Align Partners, emerged as the ranks of retail investors swelled, a trend accelerated by the pandemic. Increasingly, the funds found common cause with minority shareholders, challenging controlling families over governance, capital allocation and the independence of outside directors.

One of the clearest breakthroughs came in 2022, when K-pop powerhouse SM Entertainment agreed to all of Align’s demands. With a stake of just about 1 percent, the fund had sought the appointment of an independent auditor and changes to transactions involving a private company owned by SM founder Lee Soo-man.

C.Y. Wang, a professor at Harvard Business School, said institutional investors had historically enjoyed "very limited success in influencing the management of listed companies," citing the prevalence of circular ownership and public resentment toward foreign shareholder activists.

Align's campaign marked the "first time in Korean history that a listed company accepted all the demands made by a local shareholder," Wang said. He later published a case study on the episode.

Activist funds, once associated with foreign raiders extracting value from Korean companies, were beginning to acquire a different image: a check on entrenched management and controlling shareholders. In early 2023, the Dong-A Ilbo said activist funds were becoming "white knights for retail investors."

Activism goes mainstream

Activist investing involves taking a stake in a company and pressing for changes intended to raise its value. Those demands can range from strategic and operational shifts to better capital allocation, mergers and acquisitions, board changes and broader governance reform.

The strategy is spreading rapidly in Korea, helped by government efforts to overhaul corporate governance. Minority shareholders have gained stronger protections, while online platforms have made it easier for retail investors to coordinate and pool their voting power. Together with other policy changes, this has allowed activist funds to exert influence well beyond the size of their stakes.

Sixty Korean companies faced activist demands in the first quarter of 2026, according to Diligent Market Intelligence, matching the total for all of 2025. Governance was the most common focus, accounting for 34 percent of demands.

The tactics vary. Some activist firms launch tender offers to increase their holdings and strengthen their leverage. Others prefer quieter campaigns, engaging management privately rather than mounting a public fight.

The demands are becoming more structural, too. Earlier campaigns often focused on putting cash directly into shareholders' pockets through higher dividends. Activists are increasingly seeking board seats, changes to executive pay and greater disclosure — measures aimed at changing how companies are governed, rather than merely extracting near-term payouts.

Hwang Sei-woon, a senior research fellow at the Korea Capital Market Institute, said shareholder activism is likely to become more prominent as investors search for returns in an economy that has been stuck in a structurally low-growth environment since around 2010, despite the recent boom in semiconductor exports.

"Investors have a stronger incentive to push companies to unlock value and improve shareholder returns in such an environment," Hwang said.

Questions over lasting change

Questions remain over how durable the shift will prove, and whether campaigns framed as governance reform will produce lasting changes in the way Korean companies are run.

"It is still too early to judge whether activist funds are genuinely improving corporate governance over time," a researcher at a global nonprofit organization said on condition of anonymity in order to speak more candidly. "There is still limited research showing how far those interventions have produced lasting changes."

The debate becomes more charged when foreign funds are involved.

Foreign activist investors tend to provoke controversy more readily in Korea than in other major markets, according to Yun Jung-in, CEO of Fibonacci Asset Management Global in Singapore. He attributed that to a corporate culture in which control of a company has long been viewed as the prerogative of its controlling shareholder, as well as to lingering resentment towards some foreign capital.

"Activism should be judged not by the nationality of the investor, but by whether its proposals serve the long-term value of the company and the interests of shareholders as a whole," Yun said.

Calls to fix inefficient capital allocation or challenge decisions that disadvantage minority shareholders are a normal part of capital markets, he said.

"From a foreign investor's perspective, the rise of activism should, over time, improve corporate governance and capital efficiency in Korea and raise the overall quality of the market," he added.