MIAMI, Feb 9 (Reuters) – HoldCo Asset Management said on Monday it will not pursue proxy fights at KeyCorp or Eastern Bancshares after the two regional banks agreed to the main changes the activist investor pressed them to make.
“In light of the recent changes the Board and management made, HoldCo does not intend to pursue a proxy contest at the 2026 Annual Meeting,” the hedge fund wrote about KeyCorp, a $26 billion market-cap lender, and Eastern, valued at $5.2 billion, in a presentation released on Monday.
The activist hedge fund that invests mainly in banks launched campaigns at five regional banks last year and has, for now, concluded all of them. Its portfolio managers Vik Ghei and Misha Zaitzeff are scheduled to speak at the UBS Financial Services Conference on Monday.
At KeyCorp, HoldCo asked the board to stop making bank acquisitions, use excess capital to buy back shares and remove its lead independent director and board members who signed off on the bank’s acquisition of First Niagara a decade ago.
In December, KeyCorp Chief Executive Chris Gorman said, “We have no interest in purchasing a depository.” The bank also said it plans to buy back $300 million of stock in the first quarter and expects to repurchase similar amounts in subsequent quarters this year. It also named a new lead independent director and nominated two new director candidates for election this year.
Following the changes, Ghei and Zaitzeff wrote in the presentation that Gorman, the CEO they had earlier sought to oust, is the “right leader for the institution going forward.”
At Eastern, HoldCo asked the storied Boston financial institution to say publicly that it will not make future bank acquisitions, set a common equity Tier 1 capital ratio of between 10% and 11% and say publicly that it will use excess capital to buy back shares.
Robert Rivers, the bank’s executive chairman, said in January, “We will not pursue any acquisitions as we are completely focused on organic growth and returning capital to our shareholders.” Additionally Eastern said it would “aggressively return capital to shareholders” and manage toward a CET1 ratio of 12%.
Ghei and Zaitzeff wrote that they were toasting the bank’s leadership for making these changes.
HoldCo made a splash in September when it signaled plans to launch a proxy fight at Comerica to put pressure on the bank to sell itself after underperforming for years. Earlier this month Fifth Third completed its merger with Comerica to become the ninth-largest U.S. bank.
In quick succession, HoldCo then pushed for changes at Eastern, First Interstate BancSystem, Columbia Banking System, and KeyCorp, wading into a sector activist investors had long avoided. First Interstate and Columbia also agreed to the main changes HoldCo sought.
(Reporting by Svea Herbst-Bayliss; Editing by Mark Porter)
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