We may adopt various hedge fund strategies in managing our investment portfolio as we seek to achieve positive absolute returns, regardless of the performance of an index or sector benchmark. The primary aim of utilizing these hedge fund strategies is to reduce volatility and risk while attempting to preserve capital and deliver positive (absolute) returns under all market conditions. These investment strategies are especially useful in bear markets.

Long/Short Equity

We utilize a long/short equity strategy by taking long positions in stocks that are expected to appreciate and short positions in stocks that are expected to decline
We attempt to minimize market exposure, while profiting from stock gains in long positions and price declines in short positions

Arbitrage

We look for arbitrage opportunities where mispricing is caused by market inefficiencies
One such example is a holding company discount in Korea; we can take advantage of the time lag between the prices of a holding company and its subsidiaries (which are also publicly traded)

Event-Driven

Our event-driven investing strategy attempts to capitalize on corporate events such as mergers and restructurings that can result in the short-term mispricing of a company's stock
We seek to invest in undervalued companies that may get taken private through a tender offer

Distressed

We look for opportunities in distressed industries where competitive companies may be trading at a significant discount; a successful restructuring can boost the stock price
We invest in "fallen angels", suffering from short-term but resolvable issues, while still possessing the capacity for long-term earnings

"Stubs"

By performing sum-of-the-parts valuations, we are looking for a mispriced company whose market price does not fully reflect the value of its non-operating assets and/or subsidiaries
Many Korean companies tend to own "hidden" assets in investments and investment property which can be easily sold off

Corporate Governance

Once we acquire a significant stake of a target company, we will work constructively with the company to elicit certain actions to maximize returns for all shareholders
We typically request management to adopt and implement more shareholder-friendly policies, including increasing dividends and/or buying back stocks