HoldCo Asset Management, the $2.6bn activist hedge fund specialising in financial institutions, has built a 3% stake in Eastern Bankshares and is pressing the 200-year-old Boston lender to pursue a sale rather than continue its acquisition spree, according to a report by Reuters.
The report cites unnamed people familiar with the matter as revealing that HoldCo, led by founders Vik Ghei and Misha Zaitzeff, has urged Eastern’s board to explore a potential sale to a larger regional player, with M&T Bank among the possible suitors. The fund accuses Eastern’s management of “poor capital allocation” through a series of three bank acquisitions in five years, arguing these deals have eroded the capital raised in Eastern’s 2020 IPO.
The Fort Lauderdale-based hedge fund — known for its event-driven activist strategies in the US banking sector — is prepared to escalate pressure through a proxy contest if the board resists engagement.
Eastern’s shares jumped 5.5% to $18.17 on the news, outpacing the KBW Bank Index’s 1% gain for the day.
HoldCo’s move follows its recent role in the $11bn merger between Fifth Third and Comerica, where the hedge fund successfully pushed for a sale after months of pressure.
Founded in 1818 and demutualised in 2020, Eastern Bank is Boston’s largest locally owned bank, with more than $30bn in assets and a loyal small business and retail base. While management argues its acquisitions have strengthened its regional footprint, HoldCo contends that shareholders would have been better off with a special dividend rather than continued expansion.
