THERE is a lot about activist investor Eric Knight that intrigues. For a start, he is based in Switzerland and Italian by birth, but surely Eric isn’t a very Italian name?

“No, my father’s family is of English origin,” he says gently, “and moved to Naples at the beginning of the 19th century, when there was a substantial English community there. My parents still live there.”

Yet Knight himself, the 48-year-old fund manager who is running a virulent ad campaign against HSBC, the world’s fourth-larg-est bank, is as English as can be – Eton and Cambridge, ex-merchant banker, double-breasted pinstripe, hair scraped back. He is so tall, stooping and softly spoken, with an agonising precision of speech, he could be valuing Old Masters at Sotheby’s.

He is certainly big-brained. His firm Knight Vinke (with just 20 employees) has minutely unpicked deficiencies in HSBC’s strategy and operations to such a depth that the City and media have been surprised, and left slightly uneasy. Shouldn’t this be the work of the press?

His first thrusts accused the global bank of misallocating capital and pursuing a misguided strategy of general expansion, and ran to a 75-page report. His latest attack – carried in another spate of copy-dense press ads on Friday – is even sharper.

Knight Vinke has dug up figures which, he says, show that the HSBC board has misled investors over senior executives’ remuneration plans, and how their performance targets are calculated. It’s arcane stuff, but decidedly aggressive, and must make uncomfortable reading for the HSBC chairman, Stephen Green.

The ads ran on the day Green was making his own presentation to the press on strategy, ignoring Knight Vinke as if it wasn’t there Is Knight getting anywhere? His fund has a small investment in the bank, and it is backed by others with more. They want an independent strategic review, and changes made to boost share performance, so everyone wins. And they are asking for those changes politely – as is Knight’s style.

But there seems to be no great rush from leading shareholders to support him. Nor any great rush by Green to meet him. Knight shrugs. “We’ve talked on the phone,” he says. “And I hope to meet him soon.” Did he tell you to get lost? Knight laughs. “Not at all, he was extremely polite, and I am sure I am going to enjoy meeting him . . . at some point, I expect soon.”

HSBC nonexecutives Simon Robertson, formerly with Goldman Sachs and chairman of Rolls-Royce, and Rhona Fairhead, group chief executive of the Financial Times, have met Knight. They offered scant support, and told him he was a distraction.

“But I don’t mind,” says Knight. “Over time they will come round. Because they haven’t got a choice. If they keep going, these governance issues are going to come back to haunt them.”

Sitting in the offices of his London PR firm, Knight seems a curious fish – part upper-crust aesthete, part steely dispenser of truth and conviction.

Patience is his key virtue, he says, adding that his campaign could take three years. You can see that he doubts whether the short-termists in the City and the press understand this.

“Two things I keep getting asked – ‘what is the response from HSBC and what is the response from its shareholders?’ That misses the point. We are not looking for shareholder support. We want to engage in debate with the financial community at large. And if we are right, you will see the changes take place because a huge amount of pressure builds up on the boards to do the right things.”

It would pay the HSBC board to take him seriously, however. Knight’s recent run at Suez, the French utility giant, involved £3m of research and long-term, sophisticated campaigning in France and Belgium, drawing in politicians as well as shareholders.

He is also quick to point out that his main backer as activist is a state employee pension fund – the California Public Employees’ Retirement System (Calpers), which owns a third of Knight Vinke. They would never condone naked profiteering, though they like his 30% compound annual returns.

Forget that, though. His form of activism is, by his own description, almost more a form of social service. “Nobody really does it in the same way as us,” he says. “We are not a hedge fund. We don’t take a portfolio approach. We are not going short. We don’t borrow money. We take a long-term position and we work to create value for everyone. One of the things that distinguishes us from others is that we do take our social responsibilities very seriously. What drives me more is the sense of doing right. I have little tolerance of hypocrisy.”

Then he adds: “The French newspaper Libération called me ‘the financier of the Left’. I was quite proud of that.”

He is certainly not, he admits, a big institution man. Packed off to boarding school at eight, because his father’s career in multi-nationals involved constant globetrotting, Knight says he grew up learning to dissemble, so he would fit in.

“I am able to present myself as an Englishman, for example, but it doesn’t mean I am an Englishman. I have the ability to present myself as a corporate person, but it doesn’t mean I have a corporate mentality.”

Does that mean the pinstripe and posh drawl are an act? “I don’t think so. Presenting yourself correctly is an important quality for me. In the City, for example, you walk round on a Friday and see people are not just dressing down but dressing down to an extreme, completely casual. I sometimes wonder if that isn’t counter-productive to some extent.”

Meaning? “I am not suggesting everyone should wear a jacket and tie to work every day, but how you dress when you go to work shows to some extent the importance you give to that meeting, and I would never dream of going to see a large company casually dressed, for example.”

He must be upset I am not wearing a tie. “No, no, not at all,” he smiles. “It’s not for me to say what others should do, just the standards I set for myself.”

This stuff makes him a hard man to gauge – outwardly part of the establishment but somewhere, somehow, detached. Is it an expatriate’s love of British veneer? Knight doesn’t feel British, he says. “I am genuinely European.”

He blames his schooling. His memories of Eton are harsh – he would not send his own son there because it treats foreigners poorly, he says. Yet it sent him down an established route: Cambridge, then MIT for an MBA, then Merrill Lynch, to please his father.

“The type of background that prepares you to be a civil servant or to work for a corporation,” he sighs. “Then at 30 I decided to stop working for big companies. I was better off working for myself.”

His Dutch maternal grandfather, who ran a family shipping company, was a key influence. “I wouldn’t say I was yearning to be an entrepreneur but . . .” He never finishes the sentence. Knight Vinke is named in his grandfather’s honour – Vinke is his mother’s maiden name.

After Merrill Lynch he ran his own corporate-finance service, and jumped from project to project. He has since won the confidence of diverse backers for his approach of picking out underperforming giants, and giving them a prolonged shake.

Next year another leviathan will be getting the Knight Vinke treatment. Knight won’t say which, but he implies the shares have already been bought. “It’s difficult to run more than one campaign at a time, but we might start another one early next year.”

Does he distrust big business? “No, the premise is that there is a staggering amount of value that can be unlocked from super-large companies, and that goes against the views of many analysts in the City, that nothing can be changed, and you have to take that head-on, but you have to use techniques different from those used by other activists.”

It’s about getting people to look harder and ask better questions. And often, he says, they don’t have the resources to ask those questions. Annual reports have become incomprehensible, with consolidated figures that hide all sorts of pertinent information.

“It makes it hard to understand what the pieces are worth, which is what we specialise in. Then we engage in open debate with the stakeholders, which goes against the grain of large companies, who hate to discuss things openly – they just like everything to be polished.”

He suspects even HSBC’s own board may not have the resources to ask the right questions. “You have to be on the ground in so many countries. But some companies can get too big to be manageable, and there are diseconomies of scale beyond a certain size. A board that is doing its job has to ask itself every five years, have we got to this point?”

And what if HSBC just changes slowly? Its response so far is studiously to ignore him. He will get no credit.

Knight is unbothered. “Here’s an indication,” he says. “We started the year with almost $500m (£243m) under management. We are currently at $2.25 billion.” He raises his eyebrows. Money talks, and Knight is not walking off anywhere.

ERIC KNIGHT’S WORKING DAY

THE Knight Vinke founder usually wakes up in a hotel, near one of his offices in New York and Sacramento, or in his apartment in Monaco. “I live in Zurich, but spend most of my time travelling – 20 times to America in the last 18 months. I work all hours and am dependent on my mobile phone.”

Eric Knight has an executive committee of six. “I spend a lot of time looking at fundamental analysis, and do a lot of it myself, working with advisers. I also have to think about strategy and the next deals. I get about 150 e-mails a day, and a lot of calls from shareholders soliciting us.”

VITAL STATISTICS

Born:March 7, 1959

Marital status:in the process of getting divorced; one son

School:Eton

University:Corpus Christi, Cambridge

First job:trainee, Morgan Guaranty

Salary:undisclosed

Homes:Crans, Zurich, Monaco Car:silver Mercedes G500

Favourite book:anything by Dostoyevsky

Favourite music:John Lennon and Ray Charles

Favourite film:The Thomas Crown Affair, starring Steve McQueen

Favourite gadget:Breguet watch

Last holiday:Bahamas

DOWNTIME

“I DON’T take a lot of time off,” says Eric Knight. “I am available to work seven days a week, though I might take the odd two days off.”

He enjoys skiing and also relaxes by sailing his wooden Finnish yawl in Italy. “It’s a very beautiful boat. I rebuilt it from scratch . . . took me six years. When you race, it has to go back to the yard immediately to be revarnished. It’s great fun and the people who do it . . . they’re the kind of people I like to mix with.”

He also spends his money on Dutch old master paintings. “Trying to find pieces which are affordable – that’s difficult.”