Corporate reform is one of the cornerstone developments outlined as part of what we at Capital Group are calling the Great Global Restructuring. Asian equity markets in particular have faced a persistent challenge over recent years, namely misalignment between controlling shareholders and minority investors.
Shareholder returns in Asia have consistently lagged behind the US, driving capital and attention westward and highlighting the need for reform. South Korea is emerging as one of the early frontrunners, with strong presidential backing following the election of Democrat Lee Jae Myung in June 2025. While the last two presidents also tried to improve corporate efficiency, the former was derailed by Covid and the latter by impeachment.
Lee’s party controls the National Assembly, giving him more capacity to carry out policies. He is seeking a transformative rebalancing of household assets away from property and into capital markets, believing this can help address several of Korea’s most pressing challenges, including high household debt and income sustainability for a rapidly growing retiree population.
In this piece, analyst Andrew Chang focuses on the question of Korea’s family-controlled conglomerates, known as Chaebols. The 15 largest of these currently make up two-thirds of the Korean equity market and longstanding misalignment with minority shareholders remains a key valuation overhang.
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