HSBC Holdings plc (HSBC) is one of the largest banking and financial institutions in the world. The company operates in approximately 4,400 offices in both emerging market economies and developed countries. Its lines of business include retail banking and wealth management, commercial banking, global banking and markets, and global private banking. As of October 5, 2018, the U.K.-based company had a market capitalization of $170.7 billion. Its largest shareholders include several major global investment institutions with a high level of interest in the company and its banking sector position.
1. Fisher Asset Management LLC
As of June 30, 2018, Fisher Asset Management held 15.3 million shares of HSBC totaling 0.38% of the outstanding stock. The stake is worth $719.5 million. Fisher Asset Management operates as a fee-based advisor for high-net-worth individuals and institutions. The firm is based in Camas, Washington, and has offices in San Mateo and Woodside, California, London, England, and Frankfurt, Germany. Founded by Ken Fisher in 1979, Fisher Asset Management had about $76.7 billion in assets under management in July 2018.
2. Northern Trust
As of June 30, 2018, Northern Trust has 4.6 million shares. The holding represents 0.12% of HSBC’s outstanding stock and 0.06% of Northern Trust’s portfolio. Northern Trust is an investment manager and global institutional bank. The business is responsible for approximately $1.1 trillion in assets under management and $135 billion in banking assets.
3. Cambiar Investors LLC
Cambiar Investors LLC held 4.56 million shares of HSBC as of June 30, 2018. The firm's stake is valued at $214.9 million. It holds 0.11% of HSBC’s outstanding stock.
Cambiar was founded in 1973 and became a subsidiary of United Asset Management in 1990. The firm provides both managed accounts and mutual funds to its customers. Cambiar offers investment opportunities by using seven different strategies that focus on companies from a variety of regions and with a range of market caps. The firm believes that short-term inefficiencies in markets create opportunities for its active managers.
The Bottom Line
The banking sector and position of HSBC within it is of high interest to these three companies. As a large global bank, HSBC has managed to avoid activist investing integration since 2007 when it was targeted by U.S. activist investor Knight Vinke. The large stakes from leading institutional investors Fisher and Northern Trust are a testament to the strength of the company.
As of October 5, 2018, HSBC is reporting a one-year return of -5.67%, a three-year annualized return of 10.01% and a five-year annualized return of 0.73%. This is with a beta of 0.68. Returns over the one-year period for the S&P 500 and financial sector respectively have been 16.41% and 9.88%.