Significant Attention From Private Equity On Education Sector

Unquote.com today reports that private equity’s growing focus on the education sector is causing the multiples to increase – which is not all too surprising, given that education sector is “is the second largest on a global scale, behind healthcare.”  According to a UK government report, the education market is expected to grow by 7% CAGR during 2012-2017, reaching $6.3T on global scale by the year 2017, writes Amy King, author of the article.

But what is driving private equity to invest more of the money into this sector? Amy King reports that it’s the “growth in the international student base […] that has caught GP’s attention.”  Matthew Taylor, Director on Business Services team at DC Advisory, states the following,”It’s an enormous growth sector at the moment and we have only seen the tip of the iceberg of international students coming through pathway providers like Cambridge. […] The issue is trying to find them places to go rather than finding interest from students.”

And the scene is getting more competitive: “So many deals are happening and they’re an interesting spread,” says Taylor. “It’s almost all private equity-led, and the asset class has been more forward-thinking than trade have in that respect. We see trade players in processes, but we don’t see them as being as competitive as private equity.”

While the focus of article is primarily on the UK and global education market, the findings in the article can certainly be applied to the US – especially given the similar challenges of “not producing the level of skilled workers we need for a variety of reasons” – with clear opportunities for PE and other stakeholders (investors, startups, and more established companies) to solve the inefficiencies plaguing the education sector, and thus, in the end, bring profits to the investors and  educational outcomes to the students.

To read the original article, please visit http://www.unquote.com/unquote/analysis/2363504/education-investing-does-the-pricing-add-up

Yevgeny Ioffe

Yevgeny Ioffe

Yevgeny Ioffe, or as people call him, Yev, has been working in both the startup world and established companies. His career spans from joining Xplana Learning as it launched to Cengage Learning to MBS Direct when it acquired Xplana in 2009. Yevgeny brings to EdTech Times his passion for start-ups and technology, along with his interest in the ever evolving world of edtech. Yevgeny obtained his BSc and MA from Brandeis University and MBA from Boston College.