A top ESG investor picks up under-the-radar software stock for her portfolio

Published Wed, Aug 18 202110:24 AM EDTUpdated Wed, Aug 18 202110:46 AM EDT

Impactive Capital picked up shares of wealth management software company Envestnet during the second quarter, according to the latest round of regulatory filings with the Securities and Exchange Commission. The fund, which was co-founded by Lauren Taylor Wolfe, brings an activist bent to the environmental, social and governance space. The portfolio is highly concentrated in just a few stocks, and the founders are looking for companies that have sustainable businesses over the long term. The new stake in Envestnet is worth about $108 million, according to filings, making the position the fund's fifth largest holding. Impactive's highest-conviction bet as of the end of the second quarter was Avid Technology . The $270 million position makes up about 22% of the portfolio. The company develops, markets, sells and supports software for media companies. Shares of Avid Technology have encountered some weakness lately but are still up nearly 70% for 2021 and more than 220% over the last year. Education loan company SLM Corp. is the fund's second largest position, while Asbury Automotive rounds out the top three. Impactive increased its share count in the auto-holding company by 22% during the second quarter. The stock is up 31% this year. Impactive also doubled down on its Wex holding during the second quarter, boosting its share count by about 63%. The payment processing and information management solutions company has seen its stock fall 15% this year. The fund also increased its KBR position during the second quarter, making it the fund's fourth largest holding. In May, Taylor Wolfe made the case for KBR, saying it's a "deeply misunderstood company" and arguing that shares could rally at least 75%. Over the last three months share are down 7%, but for 2021 the stock is up 27%. "The outlook for KBR is the most attractive it's been in recent history. ... We see roughly 75% to 200% upside over the next three years. KBR is on the verge of what we believe will be an historic re-rating," she said at the Sohn Conference in May.

Lauren Taylor Wolfe at the SOHN conference in New York, May 6, 2019.

Heidi Gutman | CNBC