South Korean finance tycoon Cho Jung-ho is edging closer to ending Samsung Electronics executive chairman Jay Y. Lee’s two-and-a-half-year reign as the nation’s richest person.
Meritz Financial Group chairman Cho is now in second spot with a net worth of US$8.5 billion ($11.32 billion), thanks to last year’s blistering 76% rally in the company’s shares, according to the Bloomberg Billionaires Index.
Lee’s wealth has eroded after Samsung stock tumbled 32% last year and as the family faced billions of dollars in inheritance taxes. The 56-year-old Samsung heir is estimated to be worth US$8.6 billion, a far cry from the US$31.6 billion at his peak in January 2021.
After Meritz shares gained another 17.8% this year, outpacing a 1.5% rise in Samsung, the gap between the two billionaires shrunk to about US$100 million at the end of Wednesday’s trade, the narrowest it has ever been.
Cho, 66, built his financial firm over decades into a local powerhouse with about US$80 billion of assets under management. The company has insurance, securities and alternative investment management arms.
Cho’s rise to South Korea’s uber-rich list stands out in a country where inherited fortune largely defines wealthy. To be sure, Cho also hails from a business family. His father founded South Korea’s dominant transportation empire Hanjin Group in 1945, which includes Korean Air Lines, Hanjin Heavy Industries & Construction Holdings, among others.
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When the patriarch died in 2002, the crown jewels of the empire went to his three elder sons, while the youngest son Cho inherited “leftover” businesses, he told Forbes in 2015. Cho has ramped up the insurance business and expanded a holding company model, which has helped Meritz draw comparisons to Warren Buffett’s Berkshire Hathaway.
“Its nickname in the market is Merkshire Hathaway,” Choi Joon-Chul, co-chief executive officer at Seoul-based VIP Research & Management, said, using a local portmanteau of Meritz and Berkshire. Choi’s fund has invested in Meritz since 2012.
He said Cho has considered “talent as the core value in the finance industry” so he instilled a culture of meritocracy with strong rewards and fully entrusted his managers.
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Cho holds 51% of Meritz, which is a play on the word meritocracy. The company’s market value has surged more than 100 times since its initial public offering in 2011 to US$16 billion.
The shakeout playing out in South Korea’s wealth pecking order underscores the importance of corporate governance in unlocking value for shareholders. South Korea’s family-owned businesses have traded at a discount to their global peers due to lack of transparency and complex web of cross-holdings the founding families have used to maintain control.
Cho’s bet on asset-light financial services sector with a simple structure has generated handsome return, with investors rewarding his efforts to improve transparency and shareholder rights. The company delivered a total shareholder return of 78.3% in 2024, according to its latest earnings report, among the highest in South Korean companies.
Samsung on the other hand has faced numerous headwinds which has pulled down the company’s performance and weighed on its shares. Lee has battled legal challenges over the past decade and the leadership vacuum has partly dented Samsung’s ability to compete effectively with domestic rival SK Hynix, which is a key supplier to Nvidia.
In June 2021, Kakao founder Brian Kim dislodged Lee to become South Korea’s richest person. The Samsung heir reclaimed the top spot the following year. The emergence of non-chaebol individuals into South Korea’s rich list is a sign of how new money is beginning to reshape the country’s wealth landscape, which has long been dominated by five powerful families and some tech entrepreneurs.
Chart: Bloomberg
