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As Of Filer Filing For·On·As Docs:Size Issuer Agent 3/21/05 Sowood Capital Management LP SC 13D/A 1:54K Korea Equity Fund Inc RR Donnelley/FA |
Document/Exhibit Description Pages Size
1: SC 13D/A Amendment to General Statement of Beneficial HTML 46K
Ownership
| Schedule 13D/A |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE
13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 12d-2(a)
(Amendment No. 1)
Korea Equity Fund, Inc.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
(CUSIP Number)
Jeffrey B. Larson
Sowood Capital Management LP
500 Boylston Street, 17th Floor
(617) 603-3400
(Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications)
(Date of Event Which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the following box. ¨
Page 1 of 9 Pages
| CUSIP No. 50063B104 | SCHEDULE 13D | Page 2 of 9 Pages |
| 1 | NAMES OF REPORTING PERSONS. I.R.S. IDENTIFICATION NUMBERS
Sowood Capital Management LP |
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| 2 | CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) ¨ (b) ¨ |
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| 3 | SEC USE ONLY
|
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| 4 | SOURCE OF FUNDS
OO |
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| 5 | CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) or 2(e)
|
¨ | ||
| 6 | CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware |
| NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH |
7 SOLE VOTING POWER
— 8 SHARED VOTING POWER
— 9 SOLE DISPOSITIVE POWER
2,441,200 10 SHARED DISPOSITIVE POWER
— |
| 11 | AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,441,200 |
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| 12 | CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
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¨
| ||
| 13 | PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
29.0% |
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| 14 | TYPE OF REPORTING PERSON
IA |
Item 1. Security and Issuer
This statement on Schedule 13D relates to the shares of common stock, par value $.10 per share (the “Common Stock”), of Korea Equity Fund, Inc., a Maryland corporation (the “Issuer”), which has its principal executive offices at 535 Madison Avenue, New York, New York 10022.
Item 2. Identity and Background
This statement is filed by Sowood Capital Management LP (“Sowood”), a Delaware limited partnership. The principal executive offices of Sowood are located at 500 Boylston Street, 17th Floor, Boston, Massachusetts 02116. Sowood is an investment manager.
Information relating to each of the directors, executive officers and controlling persons of Sowood is contained in Exhibit A attached hereto and incorporated herein by reference. Each of the directors, executive officers and controlling persons of Sowood is a citizen of the United States of America.
None of Sowood or, to the best of Sowood's knowledge and belief, any of the persons listed in Exhibit A has, during the past five years, been convicted in a criminal proceeding (excluding traffic violations and similar misdemeanors). None of Sowood or, to the best of Sowood's knowledge and belief, any of the persons listed in Exhibit A has, during the past five years, been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and as a result of such proceeding was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
Not applicable.
Item 4. Purpose of Transaction
Sowood acts as investment manager to President and Fellows of Harvard College (“Harvard”) with respect to its investment in the Issuer. The letter set forth on Exhibit B has been delivered by Harvard to the Issuer, notifying the Issuer of certain matters that Harvard intends to propose for consideration at the Issuer's 2005 annual meeting of stockholders. This Schedule 13D is occasioned by the sending of such letter and Harvard's intention to propose the matters described in such letter for consideration at the Issuer's 2005 annual meeting of stockholders.
Except as described herein or in Item 4 of filings on Schedule 13D by Harvard with respect to the Issuer, Sowood does not have any plans or proposals which relate to or would result in any of the actions set forth in parts (a) through (j) of Item 4. Sowood reserves the right to make any such plans or proposals in the future or to take any other steps to enhance the value of its investment.
Page 3 of 9 Pages
Item 5. Interest in Securities of the Issuer
(a) Sowood is the beneficial owner of 2,441,200 of shares of Common Stock (approximately 29.0% of the shares of Common Stock).
(b) Sowood does not have the power to vote any shares of Common Stock. Harvard and Sowood entered into an investment management agreement as of July 1, 2004 (the “Investment Management Agreement”), pursuant to which Sowood has assumed sole dispositive power with respect to 2,441,200 shares of Common Stock.
(c) Not applicable.
(d) Harvard has the right to receive dividends from, and the proceeds from the sale of, the Common Stock.
(e) Not applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer
Sowood and Harvard have entered in the Investment Management Agreement, pursuant to which Harvard appointed Sowood as an investment manager with respect to certain assets of Harvard, including the Common Stock.
Item 7. Materials to be Filed as Exhibits
Exhibit A — Information concerning the directors, executive officers and controlling persons of Sowood.
Exhibit B — Letter from Harvard to the Issuer.
Page 4 of 9 Pages
SIGNATURES
After reasonable inquiry and to the best of its knowledge and belief, the undersigned certifies that the information set forth in this statement is true, complete and correct.
| Dated: March 21, 2005 |
SOWOOD CAPITAL MANAGEMENT LP | |||
| By: |
/s/ Megan Kelleher | |||
| Name: |
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| Title: |
Principal | |||
Page 5 of 9 Pages
| Exhibit |
Description |
Page Number In Sequentially Numbered Copy | ||
| A |
Information Concerning the Directors, Executive Officers and Controlling Persons of Sowood | 7 | ||
| B |
Letter from Harvard to the Issuer | 8 | ||
Page 6 of 9 Pages
EXHIBIT A
DIRECTORS, EXECUTIVE OFFICER AND CONTROLLING PERSONS OF SOWOOD CAPITAL MANAGEMENT LP
The names of the directors and executive officers of Sowood and their business addresses and present principal occupation or employment are set forth below. If no business address is given, the business address of such director, executive officer or controlling person is c/o Sowood Capital Management LP, 500 Boylston Street, 17th Floor, Boston, Massachusetts 02116.
| Name |
Office/Position | |
| Jeffrey B. Larson |
Principal and Portfolio Manager of Sowood | |
| Stuart Porter |
Principal and Portfolio Manager of Sowood | |
| Richard Dowd |
Principal and Chief Financial Officer of Sowood | |
| Principal and General Counsel of Sowood |
CONTROLLING PERSON OF SOWOOD CAPITAL MANAGEMENT LP
Sowood Capital Management LLC is the general partner of Sowood. The managing member of Sowood Capital Management LLC is Jeffrey B. Larson.
Page 7 of 9 Pages
EXHIBIT B
LETTER FROM HARVARD TO THE ISSUER
[Letterhead of Ropes & Gray LLP]
Korea Equity Fund, Inc.
535 Madison Avenue
Attention: Secretary
Dear Sir or Madam:
On behalf of our client President and Fellows of Harvard College (“Harvard”), the beneficial owner of 2,441,200 shares of common stock of Korea Equity Fund, Inc. (the “Fund”), we hereby notify the Fund that Harvard intends to submit the following matters for consideration at the Fund’s 2005 annual meeting of stockholders (the “Meeting”):
| (i) | RESOLVED: That the management agreement between the Fund and Nomura Asset Management U.S.A. Inc. be and it hereby is terminated. |
| (ii) | RESOLVED: That the stockholders of the Fund recommend that the Board of Directors take all necessary actions to liquidate the Fund as soon as possible. |
The reasons for proposing the foregoing matters for consideration at the Meeting are that Harvard is a significant long-term shareholder in the Fund and believes that long-term investors have been severely disadvantaged by poor investment performance of the Fund. Harvard believes this poor performance is attributable to two fundamental problems: the net asset value (“NAV”) performance of the Fund and the Fund’s persistent discount to NAV. According to our calculations, the total NAV return of the Fund (measuring the change in the NAV of the Fund, assuming reinvestment of all distributions on their ex dates) underperformed the Morgan Stanley Capital International Korea Index and the Korea Composite Stock Price Index (“KOSPI”) in the last six-month, one-year, two-year, three- year and five-year periods, with two minor exceptions, as follows:
| Annualized Returns Periods ended 2/28/2005 |
Fund NAV |
MSCI Korea |
KOSPI |
||||||
| Six months |
89.2 | % | 108.7 | % | 101.4 | % | |||
| One year |
26.7 | % | 34.2 | % | 26.3 | % | |||
| Two years |
41.9 | % | 44.9 | % | 46.3 | % | |||
| Three years |
19.2 | % | 18.5 | % | 21.1 | % | |||
| Five years |
5.0 | % | 7.3 | % | 12.5 | % |
For periods in which the Fund’s NAV outperformed one of the indexes, the relatively small differential does not justify the adviser’s management fee.
Page 8 of 9 Pages
In addition to poor investment returns, shareholders have suffered from the Fund’s persistent discount to net asset value. According to our calculations, the Fund’s average discount to net asset value for the five-year period ended February 28, 2005 was 16% (although the discount has narrowed in recent months, which Harvard believes is a result of market anticipation of possible board or shareholder action with respect to the Fund).
Harvard believes the best solution to both problems is to terminate the agreement with the current investment advisor and to liquidate the Fund.
Sowood Capital Management LP (“Sowood”) acts as investment manager to Harvard with respect to its shares of the Fund. The only material interest of Harvard and any of its “Stockholder Associated Persons” (as defined in Section 11 of the Amended and Restated By-laws of the Fund) in the foregoing proposals is Harvard’s interest as a shareholder of the Fund and Sowood’s interest as investment advisor with respect to Harvard’s investment in the Fund. Sowood Capital Management LLC is the general partner of Sowood. The managing member of Sowood Capital Management LLC is Jeffrey B. Larson. Neither Sowood Capital Management LLC or Mr. Larson has any material interest in the foregoing proposals other than in their capacity as general partner and managing member of the general partner of Sowood, respectively.
Harvard’s shares of the Fund are held of record by the Depository Trust Company, by its nominee, Cede & Co. Depository Trust Company’s address is 55 Water Street, New York, New York 10041. To Harvard’s knowledge, no Stockholder Associated Persons of Harvard own any shares of the Fund. Harvard’s address is c/o Harvard Management Company, Inc., 600 Atlantic Avenue, Boston, Massachusetts 02210. Harvard’s telephone number is (617) 523-4400. Sowood’s address is 500 Boylston Street, Boston, Massachusetts 02116. Sowood’s telephone number is (617) 603-3400.
Harvard does not know of any other stockholder of the Fund supporting the foregoing proposals as of the date hereof.
In accordance with Rule 14a-4(c)(2)(i) under the Securities Exchange Act of 1934, as amended, Harvard hereby notifies the Fund that it intends to deliver a proxy statement and form of proxy to holders of at least the percentage of the Fund’s voting shares required under applicable law to carry each of the foregoing proposals.
| Very truly yours, |
| /s/ Leigh R. Fraser |
Page 9 of 9 Pages
| This ‘SC 13D/A’ Filing | Date | Other Filings | ||
|---|---|---|---|---|
 | ||||
| Filed on: | 3/21/05 | SC 13D/A | ||
| 2/28/05 | N-Q | |||
| 7/1/04 | 3 | |||
| List all Filings | ||||