HSBC Holdings PLC is being targeted by a high-profile U.S. activist investor group that wants to force a shake-up at Europe's biggest bank.Knight Vinke Asset Management, the fund management firm that has previously forced structural changes at oil producer Royal Dutch Shell PLC and Dutch publisher VNU NV, said late Thursday it had asked the chairman and the board of HSBC to conduct a "fundamental review" of its strategy and management structure. Knight Vinke, which owns a stake of less than 1 percent on HSBC, revealed that it had been in contact with HSBC for several months. It said it wrote to HSBC's executive chairman on May 25, met with the group's finance director on June 12 and wrote to the full board on Tuesday, requesting the review.



The U.S. firm did not specify the changes it sought but said that letter "also raised a number of important governance-related concerns" and invited contact from other institutional shareholders.

HSBC has been building its presence in emerging markets in Asia, Latin America and the Middle East, as it incurs losses in the United States related to the collapse of the subprime mortgage market.

The bank set aside 1.7 billion pounds last year to cover bad loans in the United States, which prompted it to issue its first-ever profit warning.

It said earlier this week that it had agreed to buy a 51 percent stake in Korea Exchange Bank for $6.3 billion from U.S. private equity group Lone Star Funds.

Analysts were surprised at Knight Vinke's request, given HSBC's exposure to the U.S. subprime market has been known for some time and it has addressed that problem though provisions and management changes at its U.S. unit. It has also terminated the acquisition of mortgages.

"The timing is odd," said Sanford C. Bernstein analyst Antony Broadbent, noting the bank's generally healthy first-half performance.

Knight Vinke, led by Eric Knight, targets large, publicly traded companies it believes should change strategy, recruiting other institutional investors to put pressure on management. Small stakes in the companies it targets has not prevented it from forcing change.

In 2004, the firm successfully urged Royal Dutch Shell to abandon its dual British-Dutch corporate structure. It had a 0.03 percent stake in the company.

The next year Knight led another successful campaign at VNU to oppose its $7 billion purchase of IMS Health.

Currently, Knight Vinke is lobbying against the planned $56.8 billion combination of Gaz de France SA and utilities company Suez SA.

HSBC shares edged up 0.2 percent to 888.5 pence ($17.97) on the London Stock Exchange.