[Exclusive] From Domestic to Foreign-Owned... Miri Capital to Join Management of Stick Investment in Three Years

Three-Year Management Restriction for Miri Capital and Chairman Do Yonghwan

Full-Scale Management Involvement by Miri Capital Expected After Three Years

Largest Shareholder's Nationality Could Affect National Growth Fund Manager Selection

Talent Outflow a Negative Factor: Over 10 Departures in Six Months

It is expected that Miri Capital, a US-based asset management firm and the new largest shareholder of Stick Investment, a leading domestic first-generation private equity fund (PEF) manager, will begin to participate in management in earnest as early as 2028. Contrary to their initial declaration that they would maintain independence and identity by not joining Stick Investment’s board of directors, in three years the company is effectively set to transform into a foreign-owned asset management firm. This situation is emerging as a variable in Stick Investment’s bid to be selected as a manager for the National Growth Fund.

According to the investment banking (IB) industry on July 8, Stick Investment founder and chairman Do Yonghwan sold an 11.44% stake to Miri Capital. The agreement signed by both parties contains a clause restricting Miri Capital from exercising management rights for three years. Although the two sides could extend this period, the industry widely expects that Miri Capital will actively become involved in management after three years. An industry insider in private equity said, “It is hard to believe that an investor who secured the position of largest shareholder in an asset manager would be satisfied with only dividend income,” and added, “After the term expires, they are likely to participate in management in various ways, such as joining the board or influencing investment strategy.”

As of June 23, Miri Capital held a 26.88% stake in Stick Investment, making it the largest shareholder. Previously, Miri Capital announced its intention to remain a long-term shareholder without joining the board, even after becoming the largest shareholder. However, this was essentially a statement with a set expiration date. In three years, Stick Investment, once a pioneering domestic asset manager, will see its “nationality” change to a US-based firm.

There is also discussion that the nationality of the largest shareholder could become a variable in Stick Investment’s selection as a manager for the National Growth Fund’s Scaling Up League. The National Growth Fund is policy-driven capital aimed at investing in advanced strategic industries such as artificial intelligence (AI). Industry observers note that the manager’s nationality and governance structure could be considered during the qualitative evaluation process. According to the National High-Tech Strategic Industry Act, prior approval from the Minister of Trade, Industry and Energy is required for companies or institutions possessing designated national high-tech strategic technologies to conduct overseas mergers & acquisitions or joint ventures. For this reason, Korea Development Bank, which is in charge of selecting managers, is reportedly deliberating over the “nationality” of the asset manager.

Miri Capital’s existing investments in domestic advanced industry-related companies are also being scrutinized from a conflict-of-interest management perspective. Miri Capital has invested in leading domestic advanced strategic industry firms such as Gabia (AI infrastructure) and Korea Alcohol Industrial (semiconductor materials). As such, the importance of mechanisms to prevent conflicts of interest and transparency in investment review procedures is growing.

There are also reports that the internal atmosphere at Stick Investment has changed since Miri Capital became the largest shareholder. Contrary to expectations for generational change, it has been noted that, under the so-called “bridge leadership,” authority has shifted to executives born in the early 1960s, leading to increased fatigue among some of the company’s core personnel. Reportedly, over the past six months, more than 10 key staff members, including core investment managers, have either left the company or announced their resignations.

Executive A, who worked for about 15 years at Stick Investment and managed various portfolios in the PE division, is scheduled to resign in September. B, a key manager in the Growth division who worked for about eight years, has also given notice of resignation. In the credit business segment Stick Credit, Executive C, a core manager of the first blind fund finalized late last year, has already left and joined another firm. D, who managed LP relationships for years, has also announced their departure.

An IB industry insider said, “If an asset management firm, whose people are everything, continues to experience the departure of key personnel, the competitiveness of the entire house will inevitably be shaken,” adding, “If Miri Capital’s participation in management becomes full-fledged, Stick Investment, which once played a leading role in the domestic PEF industry, will be tested on how it maintains its identity and independence.”

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