NEW YORK, Jan 4 (Reuters) – Impactive Capital has nominated 4 administrators to the board of Envestnet Inc (ENV.N), a U.S. vendor of software program that helps handle investments, in a push to enhance its monetary efficiency, the hedge fund informed Reuters on Wednesday.
Impactive Capital, which holds a 7.5% stake in Envestnet, nominated two males and two girls, together with its co-founder Lauren Taylor Wolfe, to Envestnet’s board.
“Given the disappointing returns, margin underperformance, and questionable governance over which the present board has presided, we’ve concluded that change is required for all administrators up for election at this yr’s annual assembly,” Taylor Wolfe mentioned in an announcement.
Envestnet didn’t instantly reply to a request for remark.
Impactive Capital mentioned it unveiled the problem to Envestnet after its try to barter only one spot on the corporate’s board for Wolfe was unsuccessful. The fund stays open to discussions with Envestnet so {that a} proxy contest might be prevented, in keeping with folks acquainted with the matter.
Envestnet shares, which have shed about 23% of their worth previously yr in comparison with an 18% decline within the S&P 500 Index (.SPX), rose 2.2% in early commerce on Wednesday on the information. The corporate at present has a market capitalization of about $3.4 billion.
In its assertion, Impactive Capital cited poor revenue margins and dangerous capital allocation among the many causes for Envestnet’s underperformance.
It additionally mentioned Envestnet’s administration and board administrators had been overpaid and that the corporate ought to enhance its company governance by placing all of its administrators up for election yearly.
Impactive Capital cited an 11% return in Envestnet’s inventory because the fund unveiled its push for modifications on the firm on Nov. 15, double the cumulative return through the trailing five-year interval, as proof of “shareholders’ profound dissatisfaction with the corporate’s present course and their want for change.”
Along with Taylor Wolfe, Impactive Capital nominated non-public fairness agency Lane Holdings Inc chair Wendy Lane, former UBS Group AG (UBSG.S) world wealth administration co-president Thomas Naratil and former chief monetary officer of collaboration software program supplier Diligent Corp Michael Stanton to the board of Envestnet.
Impactive Capital, which was based by Taylor Wolfe and Christian Asmar, oversees $2.8 billion in belongings.
Reporting by Anirban Sen in New York; Enhancing by Muralikumar Anantharaman and Mark Potter
: .