Old Mutual Alternative Investments in South African education deal
Old Mutual Alternative Investments (OMAI) through its Education Investment Impact Fund of South Africa (EduFund) has concluded a debt and equity investment worth R68 million (about $4.5 million). The investment is geared towards developing two new schools in KwaZulu-Natal in partnership with education operator Edinvest.
“Edinvest have proven themselves to be outstanding social entrepreneurs committed to making a meaningful impact in their communities, and we couldn’t be more excited to deepen our partnership,” says Kelly Joshua, head of education investments at OMAI. “The last two years have shown how important it is for the private sector to develop innovative ways to enhance capacity in the independent education sector and to drive economic transformation across market segments.”
The two new schools, to be called Etham College, will be located in the Hilton region, north-west of Pietermaritzburg. EduFund is providing R54 million (about $3.5 million) of debt and R14 million (about $917,475) of equity to a special purpose vehicle set up specifically to develop and own the two new schools alongside Edinvest, which is investing R15 million (about $983,000) of equity and will operate the new schools.
The transaction is the second between EduFund and Edinvest, following EduFund’s investment into the Stedin College development in Ggeberha earlier in 2021. The development of the two new schools will serve the middle-income market and provide quality education to 1,050 learners.
EduFund finances and invests in the education sector in South Africa, across sub-sectors and market segments, with the aim of earning an attractive risk-adjusted return for investors and positively impacting the education sector.
The Edinvest team is headed up by Nhlanhla Khambule and Thanda Ndaba, businessmen who have built their Artisan Training Academy (ATA) to be one of the country’s leading private vocational training institutions. They opened their first two schools, Canaan College, in Umlazi, southwest of Durban, in 2019, and are well on their way to growing a national portfolio with the inclusion of Etham College and Stedin College, notwithstanding their steadfast pipeline of future developments.
OMAI made its first investment with Edinvest as part of the development of Canaan College, which serves the affordable market segment with a capacity of 1,600 learners, followed by Stedin College, and now Etham College. “Our partnership with EduFund is framed to make quality, independent education more accessible and more affordable in underserved markets and across market segments,” says Khambule.
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