[Edaily Marketin, Reporter Song Seung-Hyeon ] Listed venture capital (VC) firms are increasingly engaging in shareholder returns, such as dividends and share buybacks. Now IB Capital (Now IB) has decided to allocate funds secured through a stock split to tax-exempt dividends, while StoneBridge Ventures is considering increasing its dividends, building on its record-high half-year earnings. A similar trend is spreading across the listed VC industry as a whole.

According to the investment banking industry on the 15th, Now IB announced that it held a board meeting the previous day and resolved to conduct a stock split, consolidating four common shares into one. As a result, the number of shares will decrease from 94,929,950 to 23,732,487, and the capital stock will decrease from 47.885 billion won to 12.286 billion won. The capital reduction gain of approximately 35.6 billion won generated during this process will be converted into retained earnings and used for dividends, in accordance with a provision of the Commercial Act that allows the excess portion of capital reserves—if they exceed 1.5 times the statutory capital—to be converted into dividend funds.

Now IB plans to hold an extraordinary general meeting of shareholders on the 22nd of next month to carry out this procedure, and the dividend funds secured are estimated to be in the mid-20 billion won range. Since dividends paid by drawing down the capital reserve are considered, under tax law, a return of money previously contributed by shareholders and may therefore be tax-exempt, this move is seen as a strategy targeting institutional investors and high-net-worth individuals seeking tax savings. Additionally, with delisting requirements for stocks priced below 1,000 won taking effect this July, some interpret this capital restructuring as a precautionary measure against the possibility of the stock being designated as a “penny stock.”

In accordance with the amended Enforcement Decree of the Income Tax Act, which took effect on January 1 of this year, the tax-exempt scope for dividends paid through a reduction in capital reserves has already been adjusted once. While major shareholders of listed companies and shareholders of unlisted companies must pay dividend income tax on the portion of dividends exceeding the acquisition cost, general minority shareholders and institutional investors continue to enjoy full tax exemption. This is the backdrop that enabled Now IB to boldly prepare its shareholder return policy.

Now IB is not the only company pursuing shareholder returns. StoneBridge Ventures, another listed venture capital firm, also announced its best-ever half-year results on the 14th of last month, reporting first-half revenue of 34.6 billion won, operating profit of 17.0 billion won, and net profit of 14.0 billion won. This result was driven by performance-based compensation alone, which totaled 26.5 billion won. Based on these results, the company’s board of directors is currently discussing how to strike a balance between growth through new funds and follow-on investments and expanding shareholder returns. Although no specific method has been determined, observers note that the company has paid dividends every year since its KOSDAQ listing and, given its track record of paying a year-end dividend of 300 won per share (market price dividend yield of 4.99%) totaling 5.3 billion won last year, the focus this time is likely to be on increasing dividends.

This trend toward increased dividends is sweeping across the venture capital (VC) industry. Previously, HB Investment decided on a dividend of 3.3 billion won (market dividend yield of 5.1%), and LB Investment resolved to pay a dividend of 200 won per share, totaling approximately 4.6 billion won. Aju IB Investment, which has paid year-end dividends annually since the year following its KOSDAQ listing in 2019, set its 2025 year-end dividend at 70 won per share—a 20-won increase from the previous year. The total dividend payout also increased by approximately 2.4 billion won, rising from about 5.9 billion won to about 8.4 billion won. This is interpreted as a trend among venture capital firms—particularly those with strong financial performance—to increase dividends in an effort to defend against undervaluation of their stock prices.

Some firms have opted to cancel or consolidate their treasury shares. Stick Investment canceled approximately 2.91 million shares, TS Investment canceled approximately 680,000 shares, and Q Capital Partners canceled approximately 3.73 million shares. Additionally, Q Capital Partners saw 10 executives, including CEO Hwang Hee-yeon, purchase treasury shares. SBI Investment sought to stabilize its stock price by reducing the number of shares outstanding through a stock consolidation. While dividends entail cash outflows, share buybacks and consolidations aim to improve per-share metrics; as such, it is assessed that VCs are selecting shareholder return methods tailored to their respective financial situations.

With President Lee Jae-myung repeatedly emphasizing the need to expand shareholder returns this year, alternative investment managers—including VCs and PEFs—are following suit. A source in the VC industry predicted, “While we had no choice but to focus on maximizing returns for limited partners (LPs) in the past, the proportion of managers investing directly in funds using public offering proceeds has increased as the number of listed companies grows, so we expect to see more instances of shareholder returns in the future.”