MONTHLY HIGHLIGHT - Sept 2026 Notes from Washington and New York: "There's a Food Fight for Money"

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MONTHLY HIGHLIGHT - Sept 2026 Notes from Washington and New York: "There's a Food Fight for Money" | Pine Capital Management

*New York highlights: Columbia climate talk, a visit to the White House, JPMorgan Chase HQ and Manhattan.*

Dear friends,

I spent the past week in Washington and New York with a group of next-generation family principals, from Capitol Hill and the White House to asset managers, banks and venture firms, and a guest lecture at Columbia.

What struck me was the mix of concern and confidence. Washington felt real urgency about China and America's ability to stay ahead. New York was upbeat about AI, with very serious capital being committed. The discussions were under the Chatham House Rule, so I share what I heard without attribution.

Politics

The US will keep asking more of its allies. "Each of these countries takes advantage of us because we're rich," one senior official told us. On one panel I asked whether Washington now sees Korea and Japan as security allies or simply as industrial partners, because from Asia we are getting mixed messages. The candid answer: the relationship has become far more transactional. As another speaker put it, allies "would be remiss not to hedge against the United States."
The fear of China catching up is real. A former senior intelligence official said the US still leads on compute and frontier models, but "China is ahead of us when it comes to robotics or embodied AI." On Capitol Hill I asked whether export controls on chip-making tools can hold if China builds its own; the honest answer was that they slow China down rather than stop it. A Gulf diplomat summed up Beijing's patience: "We will be here for the next thousand years. They're going to catch up with us one day."
America's divisions will get worse before they get better. I told one group that, looking from Asia, US politics seems unable to agree on very much, and it never stays domestic: it ripples straight into our region. One Washington insider was blunt: "All indicators point to things getting worse and not better." I expect this to intensify into the November midterms and the 2028 presidential election. For long-term capital, the rules may change before an investment pays back.
Korea and Japan will have to invest in the US carefully. Japan's US$550 billion and Korea's US$350 billion investment pledges are now part of how trade is negotiated. In a meeting with the US officials, I raised what many Korean and Japanese boards worry about privately: how a large commitment made under one administration will be read in a two-party system, and whether it could face a backlash later. In much of Asia, deals done with one government are often revisited when the political wind changes.
Done well, this could be good for both sides. Samsung keeps expanding in Taylor, Texas, and Hanwha bought the Philly Shipyard to help rebuild American shipbuilding. One Korean specialty-steel maker I know won a contract to supply SpaceX after Japanese mills said they couldn't meet the timeline, and is opening a US factory as well. That is how reshoring actually happens. If Korean and Japanese companies use this moment well, they get closer to American customers and the US gets back manufacturing it lost. But a project still has to make sense after the political announcement is over.
Energy was central to almost every discussion. "Energy is security. Energy is economy," was how one White House briefing opened. AI's real limit is now power, and turbines, transformers, LNG carriers and icebreakers came up again and again, all Korean and Japanese strengths. When I asked how Korea gets through winter on Middle East LNG, the reply was that Alaska LNG is coming and "Korea and Japan are going to benefit the most from it."

Business

The serious money is going into AI, and valuations are starting to look toppy. Almost everyone we met was upbeat, and that is what worried me. As one veteran put it: "Everybody invested. Everybody levered, and then the market crashed. And here we are again with everybody being very, very excited. The difference is everybody's bigger." A venture investor went further: "The behaviour we see now is not bottom-of-cycle behaviour, it's top-of-cycle behaviour." I remain interested in the opportunity, but the price paid will matter.
"There's a food fight for money." Hyperscalers are borrowing at almost any price, crowding out other companies and governments. Expect rates to stay higher for longer.

Investment and family wealth

Global investors are quietly de-risking the US. As I told the students at Columbia, many investors are worried about a weaker dollar, high government debt and too much concentration in a handful of tech names. That capital went to Japan first, then Korea. I joked to our group that I should have told them to put a million dollars into the Korean market; it would be close to three million by now.
Forget 60/40. "Who came up with this?" asked one asset allocator. His rule: multiply net annual spending by 30, hold that much in safe bonds so you never sell in a crash, and let the rest compound. When he first measured his own spending, "it was double what I estimated."
On succession: "The first generation makes the money. The second generation loses half of it. And the third generation finishes it off." The fix: prepare the next generation to be owners, not necessarily operators.

In China, the government decides who the winners will be. In the US it is chaotic, but because it is so chaotic, the private sector has more room to win. For Korea and Japan, America's push to rebuild its industrial base is an opportunity, alongside greater demands from an important ally. Japanese households alone hold more than US$14 trillion in financial assets, about half still in cash. Washington wants that capital; our families want Korea and Japan alongside their US exposure.

These are the conversations we want to bring together at the Pine Asia Summit in Tokyo, 11–13 November. I look forward to comparing notes with many of you there.

Warm regards,

Hyuktae Kwon

Founder & CEO, Pine Capital Management

Portfolio Spotlight

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Bside Korea, Built for Korea’s Proxy-Fight Era

Korean listed companies are entering a new kind of AGM season, and one of our portfolio companies, Bside Korea, is right at the centre of it.

Winning now means counting votes, not just owning them. Since 10 September, Korean listed companies with total assets of KRW 2 trillion (about US$1.4 billion) or more can no longer opt out of cumulative voting. From next year, the same 210 companies must also hold their AGMs electronically. Under cumulative voting, an activist with a small stake can win a board seat, so a family stake no longer guarantees a friendly board. That is Bside’s business: identifying shareholders, persuading them and collecting their proxies.
From one campaign to the top of the table. Founded in 2021 as a shareholder activism platform, Bside made its name in 2022, when Align Partners used its electronic proxy service, the first in Korea, to elect a shareholder-nominated auditor at SM Entertainment. Taking door-to-door visits and post out of the process reportedly cut proxy costs to a tenth. In Bloomberg’s H1 2026 activism league table, Bside ranked #1 in Asia-Pacific and #4 globally among proxy solicitors on the activist side. It worked on eight campaigns in the first half, more than Georgeson or Innisfree M&A, at companies worth a combined US$38 billion. These included three of this year’s five largest proxy fights by market value: LG Chem (for Palliser Capital), DB Insurance and Korea Zinc. In February it also hosted ISS’s first-ever seminar in Korea. ISS is the benchmark for how foreign shareholders vote.
The other side of the table is calling too. This is what interests me most. More than 70% of Bside’s clients are now listed companies, not activists. Boards are learning that traditional defences no longer hold when minority shareholders can swing a vote. The answer is to talk to shareholders all year round, not just in the weeks before the AGM. Bside has run the campaigns from the activist side, so it knows how institutions and proxy advisors make up their minds.
Next: software for the 2027 season. Bside is about to launch a subscription platform for listed-company IR teams that covers the whole cycle. It identifies shareholders from the register, simulates outcomes by agenda item and candidate slate, manages and checks proxies, confirms attendance on the day, and runs the electronic AGM itself. Today much of this is done by hand, and reportedly only one IR agency offers full electronic AGM operations. That leaves 210 companies with few options just as the stakes rise.

Governance reform has been at the heart of the Korea re-rating story, and the AGM is where it becomes real. Bside sees that change from both sides of the table, which is why we backed it.

Sources: thebell (17 September 2026); Seoul Economic Daily (16 September 2026); Bloomberg H1 2026 Shareholder Activism League Table.

Q4 2026: Opportunity Amid Potential Volatility

by Investment Director Larry Lau

One of the most challenging aspects of this profession is deciding what to do after making a mistake and how quickly to do it. Both decisions are important and difficult, given the risk of false positives and false negatives. As investors, confirmation bias works against us. As humans, we can become convinced that our thesis is “right” and the market is “wrong,” especially after spending many days and weeks researching an investment thesis.

Our investment process is designed to guard against this bias by focusing on data rather than narratives. When the facts change, our views change accordingly. This flexibility can improve our chances of sidestepping larger drawdowns (e.g. March 2026), but it presents a unique challenge in communicating such dynamic views to clients.

Gold is a good example. We are no longer tactically bullish and would use strength to reduce any overweight position. That is a change from early September, when we shifted our tactical outlook to positive. Since then, several factors have changed:

The USD index returned to positive market structure on 16 September, having first turned negative on 14 August
Gold’s market structure turned negative on 23 September
The renewed rise in oil prices will feed into inflation with a lag
Forward-looking economic indicators point to nominal inflation reaccelerating into the high 3% YoY range in Q4 2026, though it is likely to remain below 4%
Further escalation in the US-Iran war is a tail risk we believe the market is underpricing, and it could intensify the pressures above

Last month, we noted that semiconductors (SMH) were consolidating constructively and that depressed levels could be a contrarian signal. SMH rebounded strongly, rising 9.41% in September and returning to positive market structure on 21 September. We will look to add selectively on pullbacks.

We remain optimistic about Q4 2026, supported by a strong backdrop for economic growth. At the same time, we expect episodes of high volatility that will test investors’ risk tolerance.

In our view, being patient, nimble and flexible will be decisive in achieving outperformance into year end. There will be brief moments when asymmetric risk-reward opportunities present themselves.

Market structure remains positive and the S&P 500 has been consolidating since early August. However, bad breadth has persisted. The share of S&P 500 constituents in positive market structure fell from 50.6% at the end of August to 25.1% at the end of September. In simple terms, we could again argue that such depressed levels could be a contrarian signal, as we have seen in semiconductors.

More importantly, context matters. With the US midterms approaching and the market underpricing the left-tail risk of further escalation in the US-Iran war, our focus will be on managing risk. That means participating with the market while keeping portfolio beta in check. We would raise cash after a strong rally into overbought conditions and wait for pullbacks that improve the risk-reward before adding to our best single stock ideas.

This material is provided for general information purposes only and does not take into account the specific investment objectives, financial circumstances, or particular needs of any individual. You are encouraged to consult a qualified financial adviser before making any investment decisions. Historical performance and any forward-looking statements regarding the economy, stock, bond market, economic or industry trends should not be relied upon as indicators of future results. Past performance is not indicative of future returns. Opinions expressed may change without notice and should not be interpreted as personalised advice or a recommendation. Any references to specific securities (if applicable) are for illustrative purposes only. This publication has not been reviewed by the Monetary Authority of Singapore.

Pine Capital Management