The parent company of Kleinwort Benson faces pressure from activist shareholders to break itself up and spin off all its assets, the Financial Times reported.

Kleinwort, the private banking and wealth management group with roots stretching back to 1786, was acquired in October 2009 by RHJ International, a Brussels-listed private equity fund, from Commerzbank, the German bank.

The report said that shareholders holding more than 3 per cent of RHJ have written to the company’s directors to demand an extraordinary dividend that would in effect abort its plan to create a larger banking franchise around Kleinwort. Separately, Equilibria Capital Management, a Bermuda-based hedge fund coordinating the shareholder revolt, demanded the board consider a break-up of RHJ and a spin off of Kleinwort Benson, its biggest asset.

“The best way forward for shareholders is through a break-up of RHJ, and it begins with the payment of an extraordinary dividend,” Daniel Tafur, chief investment officer at Equilibria, which itself controls about 1.5 per cent of the shares, was quoted as saying.

No special dividend is allowed

However, a spokesperson for RHJ pointed out to WealthBriefing that under Belgian company law, RHJ is not permitted to pay out a special dividend. Also, the group “has significant momentum in terms of its stated strategy of transforming itself from an industrial holding company into a focused financial services group”, the spokesperson said.

RHJ has, with its goal of becoming a financial group in mind, the spokesperson said, divested Asahi Tech (part of its portfolio in Japan) for €142 million (around $177.2 million); completed the sale of Phoenix Seagaia Resort in Japan, and completed other sales.

Kleinwort Benson itself has made a number of top-line appointments recently, the spokesperson added, pointing to examples of Stephen Rothwell, joining the firm as head of wealth management from Schroders; Danny Vogt, joining last year as chief operating officer from Royal Bank of Scotland, and Sally Tennant, joining as the firm’s new chief executive.

In its report, the FT said the immediate impact of an imposed change in strategy would be to stymie RHJ’s planned acquisition of BHF, a private banking arm of Deutsche Bank.