Moves to UK and Australia will follow proxy adviser’s expansion into US
Canadian proxy solicitation firm Kingsdale Shareholder Services has announced that it will open a new office in New York in March, marking its expansion into the US and part of the company’s plans to move further afield in the next few years.
Kingsdale’s move into the US market was also prompted somewhat by fellow proxy firm Georgeson’s decision to discontinue its solicitation and advisory services in Canada, in what Lucie Brouillette, director of marketing for Computershare, called ‘purely a business decision’.
Wes Hall, Kingsdale’s CEO and founder, says the aim is to provide proxy services on a global scale. ‘You have small players that dominate their own markets but not really anyone that provides a comprehensive service internationally – we want to be that player,’ he adds.
Heading up Kingsdale’s US operations will be Joseph Spedale, former head of sales & business development at Georgeson. Hall says Spedale brings with him a great deal of expertise, contacts and working relationships, and that building a strong team around him is ‘absolutely going to be our priority for the next year.’
A dozen employees are set to move into the New York branch in March, with plans to grow to 30-40 employees within a year. Kingsdale has also revealed plans to expand into the UK and Australia in the next few years and Hall imagines the proxy and activist landscape in both new territories will soon look familiar. ‘Behavior will be different in the UK and Australia, but I think that it will end up like the US, like Canada, and you’ll [soon] see these markets behaving the same,’ he summarizes.
He goes on to say that though there will be challenges in expanding south of the border, he doesn’t believe the market there is ‘fundamentally different’ from Canada’s. ‘The activists we approach in the US are the same ones we approach in Canada,’ he explains. ‘So the bottom line is that the needs of corporate issuers and shareholders in the US and Canada are largely the same.’
Kingsdale’s offering will remain consistent, offering what Hall calls ‘essential in-depth governance analysis’ of corporate issuers. ‘It’s not just a matter of calling shareholders and getting their votes, but also of being able to look at a company and suggest governance guidelines and getting best-in-class analytics to it, whether it’s concerning the behavior of activists, or regarding short-term or long-term investors,’ he explains.
Activist campaigns are arguably what made Kingsdale one of the biggest proxy players in Canada: in one of its most high-profile cases, the firm helped Bill Ackman’s hedge fund Pershing Square clear out the boardroom at Canadian Pacific Railway. Hall describes activist funds as an asset class in themselves and a ‘hot-button’ subject for 2015, adding that it’s an industry that’s only going to grow.
Proxy campaigns of the future may start to look different, he notes: ‘I think people are going to start behaving differently – you see a lot more settlement of proxy contests these days. You have to do a comprehensive analysis of your chances of success and of what your shareholders are really looking for – sometimes they’re not looking for change, but for you to stay the course. I think for a lot of companies that’s going to be key.’