Nautic Investment Co., Ltd. (hereinafter referred to as "We") shall establish and implement the Nautic Investment Stewardship Code on January 1, 2021 to fulfill its responsibility for the following seven principles based on the “Principles on the Stewardship Responsibilities of Institutional Investors” established and published by the Korea Corporate Governance Service.

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Principle 1. Institutional investors, as a steward of assets entrusted by their clients, beneficiaries, etc., to take care of and manage, should formulate and publicly disclose a clear policy to faithfully implement their responsibilities

The Company is a managing member (hereinafter referred to as "GP") of the Private Equity Fund (PEF) under Article 249-15 of the Financial Investment Services and Capital Markets Act, and is responsible for prioritizing the duty of election owners to PEFs.

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To this end, we make decisions regarding our potential investment candidates following our internal investment review rules which reflect ESG principles, business performance, and financial prospects of potential candidates. Also, we will faithfully fulfill our responsibility as trustees and prioritize profits of our Limited Partners by actively participating in management and  thereby performing a high rate of return.

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Principle 2. Institutional investors should formulate and publicly disclose an effective and clear policy as to how to resolve actual or potential problems arising from conflicts of interest in the course of their stewardship activities.

In order to identify, prevent and resolve potential and actual conflicts of interest among stakeholders, we conduct internal control of PEF affairs based on our risk management regulations. 

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We promise to establish risk management regulations and thereby prevent conflicts of interest between GP, PEF, and investors regarding transactions and deals. 

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In the event of an investment conflict of interest issue, we immediately report to our internal Risk Management Committee. MEmbers of the Risk Management Committee shall discuss and present solutions to such situations and may request the holding of an Investment Review Committee. The Investment Review Committee shall discuss the particular issue as its main agenda and solve such situation with the approval of the Risk Management Committee.

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Principle 3. Institutional investors should regularly monitor investee companies in order to enhance investee companies’ mid- to long-term value and thereby protect and raise their investment value.

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We are constantly manage the mid-to long-term value of our funds and portfolios through the following methods;

1) Direct participation in management or in appointment of board of directors of invested companies

2) Continuous follow-up management after deal contract signing by receiving quarterly reports on major management, financial, and non-financial matters from subject of investment and securing the right to consent and consultation.
 

3) Promotion of ESG management through constant monitoring based on our internal ESG checklist.

 

Principle 4. While institutional investors should aim to form a consensus with investee companies, where necessary, they should formulate internal guidelines on the timeline, procedures, and methods for stewardship activities.
 

Starting from the initial investment review process, we actively communicate with our investee companies to truly understand and share their vision and directions for the future. Even after deal execution, we continue to keep in touch with our investee companies through conference calls and other methods of communication.

 

Additionally, we review any potential risks or issues of conflicts of interest before finalizing our deal terms. We aim to receive prior consent from investors when it comes to such significant matters  and thereby reflect them in investment contracts.

 

In cases of potential cases involving infringement of investor interests, we shall do our best to remain consistent to our Duty of Good Faith through means such as delivering a statement of opinion on the basis of responsibility as a trustee or actively exercising and calling for voting rights at board meetings and shareholders' meetings.

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Principle 5. Institutional investors should formulate and publicly disclose a voting policy that includes guidelines, procedures, and detailed standards for exercising votes in a faithful manner, and publicly disclose voting records and the reasons for each vote so as to allow the verification of the appropriateness of their voting activities.

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We use our voting rights to clearly indicate our opinions on different matters in order to maximize investee company value and enhance LP profit.

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We keep track of our investee companies by receiving investment reports and holding managing board meetings on a regular basis. Additionally, we establish our policies on exercising voting rights based on "Voting Guidelines for Institutional Investors."

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Principle 6. Institutional investors should regularly report their voting and stewardship activities to their clients or beneficiaries.

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We report on our fund management and audit status through our annual regular employee meetings based on the laws and articles related to our funds. Additionally, we submit semi-annual reports to our LPs and conduct employee meetings to report important changes if necessary.

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We are committed towards fulfilling our voting rights and our responsibilities as trustees based on our stewardship code.

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Principle 7. Institutional investors should have the capabilities and expertise required to implement stewardship responsibilities in an active and effective manner.
 

In order to implement stewardship responsibilities in an orderly manner, we participate in various programs to enhance our professionalism and personal capabilities. We offer online/offline education programs on an annual basis and training programs from specialized institutions from different fields.

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Our Investment Team consists of key management personnel who each have more than a decade of investment experience in various M&A, IPO, and Buy-Out deals, along with investment experts with a wide range of industrial networks. 

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Additionally, by composing the majority of the risk management committee with external lawyers and accountants, we seek to enhance our expertise as a trustee/GP.

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We also keep our investment team separate from our management team in order to eliminate any potential conflicts of interest that may rise during the fund management process. 

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If you have any questions about our stewardship code, please contact us;

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- Nari Lee, Manager (nari.lee@nauticinv.com)

- Sungyong Kim, CEO/Partner (sungyong.kim@nauticinv.com)

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