NSR backs Indian educational support services provider
New Silk Route (NSR) Partners has acquired a significant minority stake in Varsity Education Management, an Indian educational support services provider. It is thought that the investment is in the $40-50 million range.
Hyderabad-based Varsity specializes in operational and support services, such as curriculum development and teacher recruitment, working with over 350 educational institutes in Karnataka, Andhra Pradesh, Maharashtra and Tamil Nadu.
"Education is another great sector, if you are an investor and intending to capture India's growing consumer story," said Jacob Kurian, a partner at NSR. Noting that regulatory restrictions that prohibit investors from making a profit in education make direct investment difficult, Kurian added that there are plenty of opportunities in related areas such as support services.
NSR, which has $1.4 billion in assets under management, has previously invested in Beaconhouse School System, a primary and secondary education chain in Lahore. Earlier this week, private equity firm said it is looking to commit as much as $300 million to Indian companies in 2012, primarily medical device manufacturers and restaurant chains, LiveMint reported.
India's parallel education segment is popular among private equity firms keen to leverage parents' desires to supplement the core services provided by schools and universities with specialist support in areas such as test preparation. Most recently, CLSA Capital Partners' paid $21.8 million for a minority stake in Resonance Eduventures, which provides coaching for entrance examinations to students interested in pursuing graduation courses in the fields of engineering and medical sciences.
Speaking to AVCJ in December, Ashish Dhawan, who is transitioning out of his role as senior managing director at ChrysCapital Investment Advisors, said the sweet spot for PE investors would be running schools with a price point above $50 a month and colleges that go after professional degrees.
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