The Wall Street Journal: Activist Elliott Management Reveals Over $1 Billion Stake In Hyundai, Praises Clearer Reorganization

SEOUL—Activist hedge fund Elliott Management Corp. said Wednesday that it has accumulated more than $1 billion in shares in three listed affiliates of Hyundai Motor Group, signaling renewed interest in South Korea’s corporate-governance reforms.

The disclosure from a Hong Kong-based unit of the New York hedge fund follows a move by the auto giant to reorganize its corporate structure in line with South Korean regulatory guidelines. The efforts have been aimed at boosting transparency around the country’s large, family-owned conglomerates, known as chaebols.

In a statement, Elliott called Hyundai’s 005380, +2.96%   plan an “encouraging” first step toward “an improved and more sustainable corporate structure.” Still, it said that more needs to be done and it intends to have discussions with Hyundai’s management and offer recommendations on the group’s plan. A spokesman for Elliott declined to comment further.

Hyundai Motor Group, composed of more than 50 affiliates, is South Korea’s second-largest conglomerate after Samsung. Elliott, which has $35 billion in assets under management, said it holds shares in auto manufacturers Hyundai Motor Co. and Kia Motors Corp. 000270, +2.52%  , as well as car-parts company Hyundai Mobis Co., but didn’t disclose its stake size in each firm. The three companies have a combined market capitalization of around $63 billion, according to S&P Global Market Intelligence.

Activist campaigns, once rare in Asia, have become more common in recent years as outsiders have tried to access a clubby investing culture in which local shareholders and family or government-owned companies often have close ties.

An expanded version of this report appears on WSJ.com.

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