ZAR 68m Edufund investment into new KZN schools set to increase quality learning opportunities in underserved market

26 Jan 2022

Old Mutual Alternative Investments (OMAI) through its Education Investment Impact Fund of South Africa (EduFund) has concluded a debt and equity investment worth ZAR 68 million. The investment is geared towards developing two new schools in KwaZulu-Natal in partnership with 100% black-owned 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 ZAR 54 million of debt and ZAR 14 million of equity to a special purpose vehicle set up specifically to develop and own the two new schools alongside Edinvest, which is investing ZAR 15 million 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.

Concludes Joshua: “Transformation and investing in the growth of independent education operators is a critical part of what we do as impact investors. We deliver attractive commercial returns to our investors in a way that benefits society as a whole. We can’t wait to see these schools completed and delivering the kind of results we have come to expect from our partnership with Edinvest.”

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About Old Mutual Alternative Investments

Old Mutual Alternative Investments (OMAI) is one of Africa’s largest private alternative investment managers in private equity, impact investing and infrastructure funds. Established in South Africa in 2000, OMAI is a member of the old Mutual group, founded in 1845.

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