Private investment or disinvestment in education?

Private investors are queuing up to lock their wealth in the galloping education sector. Will this new found craze for educational returns for the investors will pay their gamble? or the recent steps by the union government to crack whip on the extra charging private educational providers will dent the interest among the private investors in education? One needs to wait and watch the results.
Reeba Zachairah writes in The Times of India on 1 February 2010
The evergreen and recession-proof characteristics of the education sector are drawing interest among private equity firms. Billed to be a $80-billion market, the number of private equity deals in the education space has grown four-fold in the last four years.
According to Venture Intelligence, a Chennai-based research firm focused on private equity and mergers & acquisitions, eight deals worth $121 million were sealed in 2009, compared with just two deals worth $73 million in 2006.
The first educational institute to get venture capital funding in India was Career Launcher from Intel Capital as early as in 2000. And last week, India Equity Partners invested Rs 172 crore for a 26% stake in IL&FS Education and Technology Services, which provides training to schools, colleges and to the government and corporate sector.
Unlike other sectors such as steel and automobiles which bore the brunt of economic slowdown, the education sector stood out as many professionals chose to go back to school as they waited for the gloomy scenario to change. Moreover, the government’s thrust that every child should have the right to education and the enhanced outlay to develop infrastructure reflect the growth potential of the sector.
Also, education occupies a top slot in a typical Indian household budget. A cursory look around any neighbourhood would highlight the mushrooming of educational institutes and coaching centres in the last few years.
Says Rajesh Singhal, managing partner, Milestone Religare Investment Advisors, “The sector offers investment opportunities across the entire value chain, from basic to higher education, training and skills development.”
Milestone Religare has invested in IMS Learning Resources, a test preparation firm for aspiring students across management, engineering and law streams. According to Singhal, the annualised return on investment could be between 25% and 30%. Funds typically have an investment horizon of 5-6 years.

Private investors are queuing up to lock their wealth in the galloping education sector. Will this new found craze for educational returns for the investors will pay their gamble? or the recent steps by the union government to crack whip on the extra charing private educational providers will dent the interest among the private investors in education? One needs to wait and watch the results.
Reeba Zachairah writes in The Times of India on 1 February 2010
The evergreen and recession-proof characteristics of the education sector are drawing interest among private equity firms. Billed to be a $80-billion market, the number of private equity deals in the education space has grown four-fold in the last four years.
According to Venture Intelligence, a Chennai-based research firm focused on private equity and mergers & acquisitions, eight deals worth $121 million were sealed in 2009, compared with just two deals worth $73 million in 2006.
The first educational institute to get venture capital funding in India was Career Launcher from Intel Capital as early as in 2000. And last week, India Equity Partners invested Rs 172 crore for a 26% stake in IL&FS Education and Technology Services, which provides training to schools, colleges and to the government and corporate sector.
Unlike other sectors such as steel and automobiles which bore the brunt of economic slowdown, the education sector stood out as many professionals chose to go back to school as they waited for the gloomy scenario to change. Moreover, the government’s thrust that every child should have the right to education and the enhanced outlay to develop infrastructure reflect the growth potential of the sector.
Also, education occupies a top slot in a typical Indian household budget. A cursory look around any neighbourhood would highlight the mushrooming of educational institutes and coaching centres in the last few years.
Says Rajesh Singhal, managing partner, Milestone Religare Investment Advisors, “The sector offers investment opportunities across the entire value chain, from basic to higher education, training and skills development.”
Milestone Religare has invested in IMS Learning Resources, a test preparation firm for aspiring students across management, engineering and law streams. According to Singhal, the annualised return on investment could be between 25% and 30%. Funds typically have an investment horizon of 5-6 years.

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1 Comment

  1. +00002010-02-01T14:52:30+00:00282010bUTCMon, 01 Feb 2010 14:52:30 +0000 2, 2008 at 7.27 p02

    […] the article here: Private investment or disinvestment in education? « Dr. A … You can leave a response, or trackback from your own site. Printed from: […]


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