By Gina Heeb

A relatively unknown hedge fund pushed Comerica to sell itself this summer, pressuring the Texas-based lender to strike the biggest bank deal of 2025. That was just the start.

It turns out HoldCo Asset Management didn't like that particular deal, arguing it undervalued Comerica. Its battle with the bank has since turned into an all-out war. The firm urged shareholders to vote against Fifth Third Bancorp's acquisition of Comerica and sued the banks, saying it wasn't the best option for shareholders. Comerica said in a statement it was committed to the deal. Fifth Third's chief executive has said the bank is confident the transaction will close in early 2026.

HoldCo has also agitated for change at KeyCorp and several other regional banks, and co-founders Vik Ghei and Misha Zaitzeff are on the hunt for more targets. Their message is often to address underperformance or sell.

"I would be shocked if there weren't more Comericas," Ghei said in an interview with The Wall Street Journal. Bank management teams and boards have long been "complacent, and I would even argue arrogant."

A new wave of activists has circled the gates of bankland, where major campaigns had historically been few and far between, in part because of heavy regulation. Now the Trump administration's moves to ease rules around bank deals and capital requirements could give activists more room to play.

Bank deals have started to rebound as all but the biggest players struggle under the weight of regulatory, technological and other costs. Lenders are also contending with new threats, including fintechs, cryptocurrencies and the growth of private markets. As of early December, bank-deal activity by value for the year had risen to the highest level since 2021, according to S&P Global Market Intelligence.

Nathan Stovall, director of financial-institutions research at S&P Global Market Intelligence, said it is an unusual moment for activism in the banking industry. "You just haven't seen campaigns like this," he said.

With $2.6 billion in assets under management, HoldCo is a bank-focused fund whose brazen approach has clashed with many in the tightknit industry. Recently, it has been shunned by some executives and barred from some industry conferences, according to Ghei and Zaitzeff.

Others on Wall Street have looked to ramp up pressure on banks, too. Before Comerica agreed to sell, equity analysts publicly pressed the bank about underperformance and how it justified its independence.

Other activist investors that typically target other industries have also started to look at banks, encouraged by HoldCo's recent momentum, according to Jason Blumberg, founder of bank investment and advisory firm Blue Hill Advisors. Some of those investors have reached out to him to inquire about investments through his firm or joint ventures, he said.

"Now is the time," said Blumberg, who was previously at HoldCo. "2026 could be a big year."

Banks have looked to batten down the hatches in response. Some have started to review bylaws, looked to adopt rights plans or stayed in closer communication with major shareholders, according to people familiar with the matter.

Others have hit the pause button on deal considerations because of fear of how activists would respond, some of the people said. In its recent presentation to the KeyCorp board of directors, HoldCo said the bank should swear off acquisitions and instead buy back stock. KeyCorp CEO Chris Gorman backed such plans at an industry conference shortly after.

"We and that particular investor are pretty closely aligned on the most important themes," he said.

Activists still face an uphill battle at banks. Lenders often have a special status as stewards of deposits, often with unique ties to customers, shareholders and the government. At smaller banks, for example, boards and management teams are often made up of loyal community members.

Proxy advisory firm Institutional Shareholder Services recently said HoldCo "deserves credit for its campaign" at Comerica. But ISS recommended shareholders vote to approve the acquisition by Fifth Third. The vote is set to take place in early January.

Write to Gina Heeb at gina.heeb@wsj.com

(END) Dow Jones Newswires

December 30, 2025 05:30 ET (10:30 GMT)

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