MY.Alpha Launches Fund To Capitalize On South Korea’s Corporate Reforms

MY.Alpha Management, a hedge fund spin-off from York Capital Management, has launched a new fund focused on South Korea, positioning itself to capitalize on the country’s recent corporate governance reforms. The Korea Tactical Fund, which began trading in October 2024, achieved a 2.6% return in the final quarter of the year, a stark contrast to the 7.5% decline in the country’s benchmark Kospi Index.

The fund’s strategy aims to benefit from South Korea’s new “Corporate Value-up Program,” a policy introduced in 2024 to tackle the “Korea discount”—the persistent undervaluation of local companies compared to global counterparts. Under the program, firms are encouraged to improve governance and set ambitious long-term return-on-equity targets in exchange for tax incentives.

This initiative marks a shift in South Korea’s corporate landscape, which has traditionally been dominated by large family-run conglomerates, or chaebols, such as Samsung Electronics and Hyundai Motor. In 2022, the combined revenue of the top five chaebols accounted for nearly half of South Korea’s GDP, controlling almost 60% of the Kospi 200 index. Despite their central role in driving the country’s growth, these conglomerates are increasingly viewed as limiting market transparency and hindering stock market performance. In contrast, neighboring Japan and Taiwan have seen significant stock market rallies, with Japan’s Topix Index rising 18% and Taiwan’s Taiex up 28% in 2024, while the Kospi struggled with a nearly 10% drop.

Jon Jhun, a managing director at MY.Alpha, expressed optimism about the potential for progress in corporate governance, stating that recent developments bring the country closer than ever to meaningful reforms. “This time, it’s absolutely different,” Jhun told Bloomberg News last year.

MY.Alpha was founded by Masahiko Yamaguchi, who led a team from York Capital Asia to launch the hedge fund in December 2021. In just a few years, MY.Alpha has grown to manage approximately $2 billion in assets, with additional funds focused on Asia and Japan. Yamaguchi declined to comment on the new fund’s launch.

At the end of 2024, the Korea Tactical Fund managed roughly $60 million, consisting of both internal and external capital. The fund’s focus is on making bullish investments that stand to benefit from the early stages of South Korea’s corporate reforms.

One notable example is Samsung Electronics, the world’s largest memory chip manufacturer. Despite its market dominance, Samsung trades below its 2025 estimated book value on the local exchange. This valuation contrasts sharply with that of Taiwan Semiconductor Manufacturing Co., which trades at more than five times its book value.

South Korea’s recent governance reforms follow in the footsteps of Japan, which embarked on similar initiatives under the late Prime Minister Shinzo Abe in 2014. Japan’s efforts took years to show results, but measures such as enabling minority shareholders to demand better capital efficiency and improved shareholder returns have contributed to the Topix’s strong performance over the past decade, with an annualized return of 9.5% in local currency from 2014 to 2024.

MY.Alpha’s other funds have also performed well in recent months. The MY Japan Focused Fund, with roughly $500 million in assets, posted a 22% return in 2024, outpacing a Eurekahedge index of similar funds, which saw a 6.9% gain. MY.Alpha is expected to stop accepting new investors for this fund by mid-2025 to manage growth more effectively.

The firm’s flagship Asian Opportunities Fund saw impressive gains, finishing 2024 up nearly 34%, well ahead of a Eurekahedge benchmark that rose 9.4%. The fund benefited from corporate event-driven trades and the undervaluation of stocks in markets including Japan, Greater China, South Korea, and India.

MY.Alpha’s strategy in Japan has also proven successful, with the firm taking a stake in Fancl Corp. to influence Kirin Holdings Co.’s bid for the Japanese health supplement maker. The firm also profited from investments in companies like Fujikura Ltd., Paytm, Midea Group Co., and Chindata Group Holdings Ltd., the latter a data center operator backed by Bain Capital.

As Japan’s corporate landscape heats up, MY.Alpha anticipates more event-driven trading opportunities, especially as local firms with large cash reserves pursue mergers and acquisitions to fend off global competition and activist investors. Key corporate deals in Japan include Seven & i Holdings Co.’s ongoing battle against Alimentation Couche-Tard Inc.’s $45 billion bid and Nidec Corp.’s $1.6 billion offer to acquire Makino Milling Machine Co.

MY.Alpha’s continued success in both Korea and Japan highlights its ability to identify and capitalize on opportunities in the rapidly evolving Asian markets, with a keen eye on governance reforms and undervalued companies.