April 26, 2024

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[THE INVESTOR] UK hedge fund Hermes Investment Management has acquired about 1.4 trillion won (US$1.30 billion) stake in 17 Korean firms, including Samsung Electronics and Hyundai Motor, according to Korea Economic Daily on May 28.

As of end-2017, Hermes reportedly owned 0.10 percent in Samsung Electronics, 0.16 percent in Hyundai Motor, 0.61 percent in KB Financial, 0.39 percent in LG Chem, 0.43 percent in Samsung SDI and 1.20 percent in Samsung Fire and Marine. 

Hermes Investment Chairman David Stewart

The report said the firm, an activist shareholder that clashed with Samsung C&T back in 2004, is purchasing stocks mainly for investment purposes but Korean companies should be prepared for possible investor activism.

Hermes purchased a 5 percent stake in Samsung C&T in March 2004 to call for the de facto holding unit to dump its stake ownership in Samsung Electronics. After its failed attempt, it sold off its entire stake at the end of the year and earned profits worth 30 billion won.

The firm has publicly called for countries around the world to adopt measures to better protect shareholders, including the Stewardship Code, a set of voluntary guidelines encouraging institutional investors to effectively exercise their voting rights on key decisions at companies they invest in.

The Korean government plans to adopt a domestic version of the Stewardship Code, that was first enforced in the UK. It remains to be seen whether the nation’s largest institutional investor National Pension Service will adopt it, which could have a ripple effect across the market.

By Lee Ji-yoon (jylee@heraldcorp.com)