Hedge Funds Should Try Korea Inc. in This Tough Global Economy

Global banking chaos, financial system jitters and broader economic uncertainty are hardly perfect conditions for activist investors, who have been on a shake-up spree for the past year. So where to now?

For those looking, South Korea could prove to be fertile hunting ground. In recent months, several companies including Hyundai Glovis Co., Korea Zinc Co. and GS Holdings Corp., have boosted dividends, buybacks or updated their shareholder return policies. Authorities are finally focusing on refining corporate governance as the so-called “Korea discount” — a long-standing overhang of large, interwoven conglomerates that have resulted in low stock market valuations — persists. It helps, too, that local investors are stirring the pot, priming the field for global hedge funds.

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