A group of investors led by Santa Monica-based hedge fund Dalton Investments went public with a campaign pushing for reforms to Korea’s benchmark equity index, the Kospi exchange, one of the worst performing markets in the world.
“The Korean market is not operating efficiently,” James Lim, a senior research analyst for Dalton’s Asia equity research team, said in an interview.
“Corporate profits have gone up over 80 percent in the last seven years, and returns are low,” Lim added. “The whole market is trading below book value. It’s at a historic low.”
Dalton, which has $4 billion in assets under management, has roughly $200 million invested in Korea but sees that investment growing.
“We are increasing our exposure in Korea,” Lim said.
He added that Dalton sees opportunities with low stock valuations coupled with reforms being discussed by Korean stakeholders in the equities market.
“We thought it was a good time to provide opinions from foreign investors,” Lim said about the timing of the letter sent last month.
The shareholder consortium has urged the South Korea’s National Pension Service – which owns about 7 percent of the Korean equities index – and the Korean government to implement initiatives designed to strengthen the governance standards of Korean companies and thereby improve returns across the Korean equities market, which has chronically underperformed since 2012, according to Lim.
Besides Dalton, the investor group included San Diego-based Brandes Investment Partners, New York City-based investment firm Ruane Cunniff & Goldfarb, and South Korea-based investment firms Value Partners and KCGI.
• • •
K1 Picks Up GoCanvas
El Segundo-based private equity firm K1 Investment Management invested $150 million in Canvas Solutions Inc., which does business as GoCanvas Inc. The company is a privately held provider of mobile applications and forms needed for data collection and sharing.
The Reston, Va.-based Canvas Solutions had just north of $20 million in 2018 annual revenue, according to company founder and Chief Executive James Quigley. The company recently opened a second office in Sydney and is ramping up operations, Quigley added in an interview. The company has plans to possibly expand to Europe and California within a year or so, he said.
Canvas Solutions is a mobile platform that helps businesses automate how work is done, replacing certain office software, processes and paperwork.
Quigley said the impetus behind the sale to K1 was access to funds to help it expand.
“We decided to partner with K1 because they are more than a source of capital,” Quigley said. “K1 has an impressive track record of helping growth-stage companies scale through its operations capabilities.”
K1 founder and Chief Executive Neil Malik was not immediately available for comment.
• • •
OP Bancorp To Open
First Branch in Texas
Downtown-based OP Bancorp, parent of Open Bank, plans to open its first full-service branch outside of California in May, according the institution’s president and chief executive officer.
The $1 billion-in-asset bank, which has 8 branches in California, plans to open a full-service branch in Carrollton, Texas – a northern suburb of Dallas. Open Bank President and Chief Executive Min Kim said in an interview the branch would open in three months.
• • •
Super League Shares Fall 23 Percent in IPO
Shares of Santa Monica-based Super League Gaming Inc., a cloud-based platform that helps connect online gamers to each other, fell 22.7 percent in its trading debut on the Nasdaq Stock Market Feb. 26.
Super League, which priced at $11 a share in the initial public offering, raised $24.9 million. The stock closed Tuesday at $8.50, down $2.50.
It trades under the under the “SLGG” ticker symbol.
Have a deal tip? Pat Maio can be reached at [email protected] or (323) 556-8329.
