CALPERS, the American pension fund, has raised the pressure on HSBC, the world’s third-biggest bank, setting its management team a six-month deadline to outline plans for radical change.

Christy Wood, Calpers’ head of global equities, told The Sunday Times it wants HSBC to reveal detailed plans to refocus the group, address share-price underperformance and set a series of testing financial targets.

“We want to see this unfold in the next few months. If they do not set it out before July 1 then there is a problem,” said Wood.

Calpers is an investor in HSBC through its tracker portfolio but its stake is not above the 3% threshold at which it would be obliged to disclose it. Wood’s comments are the first time Calpers has made a public statement about HSBC despite the pension fund’s support of an aggressive campaign by the activist investor Knight Vinke.

“HSBC’s management needs to come up with a plan to turn round the fundamentals of the company and focus on where it has a comparative advantage. They need to outline precise metrics and milestones and execute on them. We need a plan of action,” said Wood.

Calpers has a close relationship with Knight Vinke, which manages $330m (£166m) for the pension fund. It provided seed funds when the group was set up in 2003 and has a one-third share of the management company.

Wood’s comments will pile further pressure on HSBC’s management, led by chairman Stephen Green and Michael Geoghegan, the chief executive.

Wood is one of the world’s most powerful fund managers, responsible for about $150 billion of Calpers’ $256 billion investment portfolios.

Analysts said the move also marks a new phase in the battle between HSBC and Knight Vinke, run by Eric Knight. He launched his campaign in May with a damning critique, which attacked HSBC’s management as “complacent” and the bank for consistently underperforming since it left Hong Kong in 1992 to make London its headquarters.

Knight has also accused HSBC of making a series of strategic mistakes by buying banks in developed countries, owning a large number of sub-scale retail-banking businesses and squandering the chance to be the dominant western bank in China. Knight has also called for assets in France and America to be sold and for the merger or sale of the investment-banking business.

The bank’s corporate governance has also come under fire. Knight Vinke wants Green to move from executive to nonexecutive chairman and has been critical of HSBC’s use of 28 international banks as the bench-mark for setting executive pay.

Last month the fund manager suggested HSBC misled investors over the terms of a bonus scheme for top executives – a charge denied by the bank.

HSBC has been more widely criticised for its acquisition of the American consumer-finance business Household, which racked up bad debts of $3.4 billion in the three months to the end of September.

The bank has so far rejected Knight’s demands for a strategic review to be led by Simon Rob-ertson, the senior nonexecutive director and former Goldman Sachs investment banker.

HSBC has argued that it carried out a review earlier in the year and has set out its ambitions to target growth from emerging markets. Last month Green set a target for 60% of profits to come from emerging markets against the current 50% and 40% three years ago.

Green has pledged to break with tradition and set financial and operational targets from 2008. Big deals in America and Europe have been ruled out, HSBC took control of Taiwan’s The Chinese Bank this month and is attempting a $6.3 billion acquisition of Korea Exchange Bank. Bankers said HSBC was actively looking at other big acquisitions.

Though Knight Vinke has met most of the significant investors and sent 600 copies of a detailed report, only New Star Asset Management has publicly come out in support of the campaign.

Some investors say Knight Vinke launched its campaign too late and should have struck a year ago. However, Wood said Knight was “right on target”.

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