Mutual funds take FP, school and university

At the end of last month, the British investment fund Cinfin bought the Alfonso XL Sabio University from CVC (another fund) for 2,000 million euros. As soon as the course began, in September, the insurance company Swiss Life took over the course Educare Consolidated NetworkWhich controls a total of eight schools. In July, Orbital Education acquired Seeds Center In Albacete, also arranged. In April, The British School of Madrid It reached an agreement with Inspired Education Group, which operates more than 115 schools around the world. EQT, a fund of Swedish origin, is the new owner of European UniversityBut it also controls Nord Anglia, the world’s largest school network.

These latest operations are a manifestation of the growing interest of international investors in Spanish education. But if fewer and fewer children are born,Why is it a rising business?? The first reason, as Rafael Ramiro offers, is fragmentation. Mutual funds enter when they see that there is a highly fragmented sector into which they can integrate. “There are thousands of The centers are small and many of them belong to families Who do not have high investment capacity. As happens when funds enter other sectors, a return is sought within a period of about five years and then the fund exits, when huge investment is made in infrastructure or technology and the sector succeeds,” points out this independent institutional advisor.

Moreover, we must take into account the fact that we have fewer children that can create a paradoxical effect. “Those families who previously took their three children to a public or subsidized center can now consider taking their only child to a private center and focus resources,” Ramiro adds. Families are becoming more demanding and know that these educational networks “guarantee” elite training directed to the business world in an “increasingly difficult” labor market. In fact, some of these schools are exclusive They already have agreements with institutions such as the Empresa Institute (IE), so that a path is created linking the first educational stages and the first job.

The investment funds made their first education operation in Spain in 2014, when Magnum Capital Industrial Partners bought a majority stake in Nace Education Group. Later in 2017, Magnum sold Nace to a US fund called Providence.

Increase future prices and expatriate customer

The existence of the funds is temporary, and has an expiration date, but the networks of new schools and universities will remain, will be consolidated, and, moreover, the prices of private education will eventually rise. “Compared to other countries, private education in Spain is not very expensive,” says Ramiro. The profile of parents willing to pay for elite schools is of medium to high economic level, and there are many of them Expatriates or foreign managers Who work remotely for multinational companies. Therefore, these schools are located in cities like Madrid or Barcelona. Although Malaga It has also made a place for itself as a place of influence.

These international educational clusters usually include about a hundred schools spread around the world, which helps in the international mobility of students. This means that if the family has to change the country, there will be continuity in the education of the minor. They are networks that put an end to what is old The “diplomat’s son” syndrome. Who had to start from scratch several times throughout childhood and adolescence.

Fernando Botella, CEO of Think&Action, a company specializing in organizational transformation, adds: “In universities and colleges where investment funds are involved, very high returns are achieved per student and, if compared to other sectors, it is a predictable market, with constant demand and low risks.” “Money enters in search of market concentration in a sector that never stops growing. “They call ‘e-learning’ (virtual learning) the new oil,” Boutella explains.

A controversial aspect of this educational work is that, in addition to universities and private schools, investment funds have also entered subsidized centers, which receive support from the state. This is the case with Educare, which has eight independent and Catholic schools. From the Private Schools Association CICAE, they strongly criticized this and assured this newspaper that they “Very anxious” and “totally rejected” The acquisition of coordinated positions by funds or business groups with an apparent profit motive.

In Catholic schools, which include almost all the coordinating schools in Spain, they know that the takeover has been controversial and understand that educational agreements should focus on non-profit entities. Luis Centeno, Secretary General of Catholic Schools, says, “This process does not reveal what is happening in the supported centers, as they are what are known as “newly supported.” That is, it has little historical background, is promoted by commercial companies, and is not originally linked to religious sects.

Regardless of whether this “new harmonized agreement” raises some doubts, the education sector will continue to make gains in Spain in the coming years. “It is a very important change, because in our country, as in the rest of Europe, The investment in education has always been the state, not from private capital“Many public centers are merging or closing in Spanish cities, which is an indication that the public education model needs to be rethought in order to be competitive and of quality. In other words: there cannot be as many schools as bars in a country suffering from a serious birth crisis,” warns Ramiro.

The future role of the state and the confrontation between the “new and old” schools.

In the coming years, the public sector will focus on providing more services to an already growing segment of the population: the elderly. But it can also explain the “boom” in the special education business, Ramiro says A world where knowledge is no longer everything. “This new private education avoids rote learning, it values ​​what are known as soft skills or social skills. In these centers, differentiation is sought, but not through the accumulation of knowledge.”

Along these lines, Botella believes that there is a negative confrontation in Spain between the old model and the new model: between business schools and universities: “It is common to find university academics talking about ‘business schools’ as if they are not serious. They, in turn, speak of the university as an outdated and slow bureaucratic entity that does not care about the needs of society. The interesting thing, says this expert, will be That they will both interact, and that they will complement each other: That the academic and research prestige of the “old school” was combined with the employability and agility of the “new school.” Tomorrow’s education will be increasingly different from today’s, also because of the source of the money that supports it.