Impactive Capital nominates four directors to Envestnet's board

Envestnet

04/01/2023 12:00

By Anirban Sen
       NEW YORK, Jan 4 (Reuters) - Impactive Capital has
nominated four directors to the board of Envestnet Inc  ENV.N ,
a U.S. vendor of software that helps manage investments, in a
push to improve its financial performance, the hedge fund told
Reuters on Wednesday. 
    Impactive Capital, which holds a 7.5% stake in Envestnet,
nominated two men and two women, including its co-founder Lauren
Taylor Wolfe, to Envestnet's board.
    "Given the disappointing returns, margin underperformance,
and questionable governance over which the current board has
presided, we have concluded that change is required for all
directors up for election at this year’s annual meeting," Taylor
Wolfe said in a statement.
    Envestnet did not immediately respond to a request for
comment.   
    Impactive Capital said it unveiled the challenge to
Envestnet after its attempt to negotiate just one spot on the
company's board for Wolfe was unsuccessful. The fund remains
open to discussions with Envestnet so that a proxy contest can
be avoided, according to people familiar with the matter. 
    Shares of Envestnet, which is currently valued at about $3.4
billion, have shed about 23% of their value in the past year
compared to an 18% decline in the S&P 500 Index  .SPX .
    In its statement, Impactive Capital cited poor profit
margins and bad capital allocation among the reasons for
Envestnet's underperformance.
    It also said Envestnet's management and board directors were
overpaid and that the company should improve its corporate
governance by putting all of its directors up for election every
year. 
    Impactive Capital cited an 11% return in Envestnet's stock
since the fund unveiled its push for changes at the company on
Nov. 15, double the cumulative return during the trailing
five-year period, as evidence of "shareholders' profound
dissatisfaction with the company's current direction and their
desire for change." 
    In addition to Taylor Wolfe, Impactive Capital nominated
private equity firm Lane Holdings Inc chair Wendy Lane, former
UBS Group AG  UBSG.S  global wealth management co-president
Thomas Naratil and former chief financial officer of
collaboration software provider Diligent Corp Michael Stanton to
the board of Envestnet.
    Impactive Capital, which was founded by Taylor Wolfe and
Christian Asmar, oversees $2.7 billion in assets.
 (Reporting by Anirban Sen in New York; Editing by Muralikumar
Anantharaman)
 ((Anirban.Sen@thomsonreuters.com; Twitter: @asenjourno; Reuters
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