By Svea Herbst-Bayliss
NEW YORK (Reuters) – Impactive Capital doesn’t push companies to sell but wants them to do better on their own, co-founder Lauren Taylor Wolfe said on Tuesday, citing student loan company SLM (NASDAQ:) and gym chain Basic Fit as potential enduring success stories.
“We take the long term view,” Taylor Wolfe said, adding that the firm, which calls itself an impact oriented activist fund, wants companies to operate as their best selves and will work with management on strategies to push up the stock price. “We look for stable businesses where time is our friend.”
Taylor Wolfe spoke at the 13D Monitor Active-Passive Investor Summit in New York.
Basic Fit, a Dutch fitness club chain, offers a bare bones workout space for members with weights and cardio equipment but few employees and no pools, saunas or scented towels. With over 1,600 locations now, Taylor Wolfe predicted the company, headquartered in Hoofddorp, Netherlands, could have 3,000 locations by 2030. Staffing can be as small as having only one employee on site during peak times.
The company reported a 13% gain in year-over-year membership growth during the third quarter and a 17% gain in quarterly revenue. It closed trading at 24 Euros a share on Monday and could grow to 70 Euros a share in three years, Taylor Wolfe said.
Similarly, SLM, commonly known as Sallie Mae, could see its stock price roughly double in three years, she said, noting that the student loan company has done a good job buying back its stock. The stock closed at $22.95 on Monday and she said it could climb to $44 a share in three years.
The company, which originates $7 billion in loans every year, has captured 60% of the market, Taylor Wolfe said, adding the market share is poised to grow as some competitors have gotten out of the business.
