By Tom Evans and Matthew Bedrossian

The growth of private spending on education presents an opportunity for private equity. While public spending on education in the OECD as a proportion of gross domestic product decreased slightly between 2003 and 2012, the number of students attending private secondary institutions in the OECD rose from 11.07% to 15.99% during the same period. An indication of the global demand for quality private education is that by the end of 2015, UK elite public schools had set up 44 international branches around the world, most notably in the Middle East and the Far East.

The opportunity for private equity is in both direct education providers, those businesses that “teach” students – childcare, infant, secondary and tertiary institutions – and for service providers to those institutions – for example, providers of technology solutions. The latter type of investment space, frequently referred to as “Edtech”, has seen aggregate global deal size grow from $1.82 billion in 2009 to $5.5 billion in 2015.