"Let's Share the Profits"... Listed VCs Shift Focus to Shareholder Returns [VC Now]

More Than Half of VCs Issue Dividends; Some Exceed Net Income
Expansion to Treasury Share Cancellation and Capital Reduction
"Shareholder Return Becoming a Strategic Priority"

There is a growing trend among domestic listed venture capital firms (VCs) to strengthen shareholder return policies, such as increasing dividends, canceling treasury shares, and capital reductions. Even as both investment and exit activities have slowed, the flow of distributing cash externally continues, reflecting shareholders' demands for "sharing performance."

According to the Financial Supervisory Service's electronic disclosure system on April 6, more than half of the 18 listed VCs in Korea paid dividends based on last year's performance. There were also cases where dividend plans were revised to actively reflect shareholders' opinions, or dividends were paid out that exceeded net income.

Clear Statement on "Securing Dividend Resources"... Active Shareholder Return Initiatives

In particular, the most recent dividend plan confirmed at the shareholder meeting of Atinum Investment is a case where shareholders' demands led to actual policy changes. The management initially proposed a dividend of 130 won per share, a significant increase from last year's 70 won. However, after accepting opinions voiced at the meeting, the amount was raised to 140 won per share. The dividend yield exceeded 4%, surpassing the average for KOSDAQ-listed companies.

Additionally, Lindeman Asia paid a dividend of 250 won per share, achieving a dividend yield of 5.0%. The total dividend payout was approximately 3.1 billion won, which exceeded last year's net profit. HB Investment also confirmed a dividend of 120 won per share, with a dividend yield in the 5% range. LB Investment decided on a 200 won per share dividend, totaling approximately 4.6 billion won, while Now IB also set a dividend payout of about 2 billion won. DSC Investment, Stonebridge Ventures, and Aju IB Investment, among others, continued their existing dividend policies.

All of these dividends were based on last year's performance. Even if performance fees decrease due to a slowdown in investment exits, dividend resources can still be secured through management fees, realized profits from past investments, and internal reserves.

Beyond Dividends: Cancellation and Capital Reduction... Explicit "Shareholder Return Strategy"

Starting this year, shareholder return efforts are expanding beyond simple dividend payments to more active approaches. Some VCs have sought to enhance shareholder value by adjusting their capital structures through methods such as treasury share cancellation, capital reduction, and stock consolidation. These moves to pre-secure dividend resources or adjust capital structures are establishing shareholder return as a sustainable strategy rather than a one-off policy.

TS Investment reduced the number of outstanding shares through a treasury share cancellation, while SBI Investment pursued stock consolidation to stabilize its share price and enhance corporate value. Q Capital chose a capital reduction to expand its distributable profits. A representative from Q Capital explained, "The gains from the capital reduction will be used as dividend resources through future capital surplus transfer procedures," and added, "We plan to establish and actively implement a shareholder-friendly dividend policy to enhance shareholder value."

There are also increasing cases where companies make separate disclosures of their plans to enhance corporate value and explicitly state shareholder return policies as part of their mid- to long-term strategies. Now IB set its goal as "maximizing investment performance and creating a sustainable profit base to enhance shareholder value," while Aju IB Investment and Atinum Investment also announced their intention to continue shareholder return policies, including dividends.

"Expanding Distribution Amid Investment Slowdown"... Signs of Structural Change

Recently, the government and political circles have been emphasizing the expansion of shareholder returns, reinforcing this trend. With the promotion of the "Corporate Value-Up Program" and discussions on amending the Commercial Act, protection of shareholder rights and enhancement of corporate value have become major topics. As dividend increases and treasury share cancellations spread across listed companies, the VC industry is also seen as responding to these changing conditions.

A VC official stated, "The recent Value-Up policies and discussions on amending the Commercial Act have definitely amplified shareholders' voices," adding, "Once a shareholder return measure is introduced, it must be maintained consistently, so we are internally discussing how we can manage dividends and treasury share policies within our means."

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This year's performance is also a variable. While expectations for policy funds are rising, the actual investment and exit markets have not become as active. The VC sector's ability to generate cash remains limited. Although a stable profit base from management fees and equity method gains is compensating for this, if the exit market recovery is delayed, concerns about the sustainability of shareholder return policies are likely to grow.

Another industry official said, "The issue of shareholder returns will continue to be highlighted under the new administration," and added, "If the market does not recover quickly, balancing investment and returns will become a major challenge during each shareholder meeting season."

This content was produced with the assistance of AI translation services.