An $800 Million Fortune Is Made By A Little-Known Family After One Tesla Deal

As a result of Tesla Inc.'s enormous success, both huge tycoons behind battery manufacturers and individual investors have created enormous wealth worldwide. 

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A new ultra-rich family has entered the ranks of the ultra-rich after a single order was placed with Elon Musk's electric car maker.

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In the past year, L&F Co. has soared 82% in the share price of the company because Tesla placed an order for $2.9 billion for the company. The company, which produces high nickel cathodes that are essential to the production of electric vehicle batteries, won that order this year. According to the Bloomberg Billionaires Index, the listed holdings of Hur Jae-hong and his family now amount to more than $800 million. 

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With the Tesla win, Hur solidifies his position as a dealmaker and gives his family a new source of wealth, since LG Group has been a major source of wealth for decades. As a result of batteries supplied by LG Energy Solution Ltd., the US car manufacturer has long used L&F cathodes. However, this is the first time it is a direct client. 

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A Seoul analyst with Meritz Securities Co. said L&F has positioned itself for growth. Its focus is on technology and production efficiency, so its DNA seems to be strong.

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A great-grandfather of Hur's, Huh Man-jung, started LG in 1947. In the company's beginning, Huh Man-jung was co-founder of the conglomerate, which produces consumer electronics and batteries for electric cars. A branch of the family incorporated energy-to-construction giant GS Group in 2004, whereas L&F was established in 2000, after Seronics Co. was acquired by the family. When Hur's grandfather established the company in 1968, it decided to branch out into LCD backlights, primarily targeting LG Display Co. Seronics owns 14.4% of L&F.

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During the last few years, shares of companies that provide the components or materials that are used in the manufacture of electric cars have surged in value, bringing a great deal of wealth to their owners just like they have with L&F stocks. 

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As a result of the stock's jump of more than 1,600% over the past year, Ryu Kwang-ji, chairman of the chemical manufacturer Kum Yang Co., has a stake worth about $1.4 billion, according to Trade Algo calculations derived from the most recent corporate filings by the company. During the past year, Ecopro Co., a company that produces battery materials, has increased its value by about 500%, putting Lee Dong-chae and his family's holdings at $3.1 billion. Lee was convicted of trading with undisclosed information last year, and the ruling has been appealed for a different sentence as the prosecutors want a different punishment for him. The rise in prices has raised eyebrows in the past.

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The Tesla deal could have a transformative effect on L&F's business, which is largely dependent on LG Energy Solutions for most of its revenue. 

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Rho added that it matters even more that the most recent client of itss is not just any client, but the market leader, and that really matters a lot.

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There was no comment from L&F for this article. 

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Since his father's death in 2010 and since then being Seronics' chief executive officer and Chairman of L&F, Hur has joined the family empire as a chemical engineer. He has studied chemical engineering at Yonsei University in Seoul, and obtained his Master's degree from the University of Southern California. Before joining Seronics and L&F, he worked in the research department of LG Display, the former LG Philips LCD, before moving to Seronics and L&F. In both companies, he owns shares. 

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The company started developing cathode materials in 2005, but soon it began to dominate the market for rechargeable lithium-ion batteries, establishing its first significant business segment in the process. In 2020 and 2022, LG Energy Solution accounted for about 80% of all the revenue generated by last year, with sales skyrocketing to 3.8 trillion won ($2.9 billion). 

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In 2021, L&F entered into a deal with a company that is led by the former CEO of Tesla, JB Straubel, to recycle batteries. The company is headed by his former chief technology officer. According to Meritz Securities’ Rho, L&F could gain new customers after Redwood announced in January that it would supply Panasonic Energy Co. with cathode materials, as well as Panasonic Energy Co. with cathode materials. 

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L&F forecasts, based on a March research report by Shinyoung Securities Co. analyst Jin-soo Park, that by 2025 its dependence on LG Energy Solution will drop to 50% of its revenues. According to him, 30% of the sale will come from unidentified manufacturers — presumably Tesla — as opposed to a large number of other manufacturers. 

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In terms of diversification, Park called that "positive."