HSBC shareholder revolt gains support

by Gill Montia

Story link: HSBC shareholder revolt gains support

HSBC has seen a strengthening of its shareholder revolt led by Knight Vinke, the asset management firm.

The latter, which has accused the bank of poor governance and strategy, has secured the support of New Star Asset Management, which owns around £300 million HSBC shares and has responded positively to Knight Vinke’s role as a shareholder activist.

According to Guy de Blonay, head of New Star’s specialist financials fund, “Anything that boosts the HSBC share price from its low level has to be supported. We support the principle of trying to tackle the poorly performing share price. Since Knight Vinke started to raise the issues, the shares have performed very well.”

Knight Vinke also has the support of two large US pension funds and has reported positive outcomes from meetings with UK shareholders, although none have yet publicly joined the campaign.

This week Knight Vinke launched a campaign involving full-page newspaper advertisements, accusing HSBC it of poor strategy and poor governance.

Much of Knight Vinke’s case rests upon its opposition to the bank’s diversification strategy, which it belives has led to the group containing a large number of sub-scale businesses with weak market positions.

HSBC is reported to have held a number of meetings to reassure institutional investors.