Captivating Prospects: Impactive Capital Spots Growth in SLM and Basic Fit

Impact-focused activist fund Impactive Capital has identified student loan provider SLM and gym chain Basic Fit as companies with strong long-term growth potential. Lauren Taylor Wolfe, co-founder of Impactive Capital, expressed confidence in these businesses during her speech at the 13D Monitor Active-Passive Investor Summit in New York on Tuesday.

Taylor Wolfe emphasized the fund's strategy of collaborating with management teams to enhance stock performance, targeting stable businesses where time can contribute to growth. She highlighted that the firm is focused on improving companies independently, rather than pushing for sales.

Basic Fit, a Dutch fitness club chain known for its minimalist approach to gym facilities, has expanded significantly, reaching over 1,600 locations. Taylor Wolfe projected that the chain could grow to 3,000 locations by 2030. The company's lean business model includes a minimal staffing structure, sometimes employing only one worker during peak hours.

The fitness chain reported a 13% year-on-year increase in membership growth and a 17% rise in quarterly revenue for the third quarter. With shares closing at €24 on Monday, Taylor Wolfe forecasted that the stock price could rise to €70 within three years.

SLM, also known as Sallie Mae, is another company in which Impactive Capital sees significant growth potential. The firm predicts that the student loan company's stock price could nearly double from Monday's closing price of $22.95 to reach $44 within the next three years.

Taylor Wolfe praised SLM for its effective share buyback strategy, noting its market dominance with a 60% share and annual loan issuances of $7 billion. SLM's share is expected to increase further as some competitors exit the market.