Newsletter: Aug. 13, 2019

Dear Friends & Colleagues,

It’s hard to believe that in a couple short weeks most students will be back in school and summer break will be winding down. Here in Chicago we live our best months June to October and cherish each day of sunshine and warmth. We hope you found time for reflection, sport, family, adventure, or whatever brings you the most joy and energy this time of year.

It’s been a productive first half of the year for our team. We invested in one new platform in May and have made several follow-on acquisitions across the portfolio. We expanded our investment and operating team by two professionals and completed numerous executive and Board-level hires. We celebrated births, birthdays, and individual recognition awards, as well as the continued impact that our network of businesses is having on the market.

Portfolio Highlights

In May, we completed our sixth portfolio investment in Reading Plus, a digital adaptive literacy intervention and practice tool for grades 3-12. Since January, we had been working alongside Dr. Steven Guttentag, an Executive in Residence, to source opportunities in the K12 curriculum market and were thrilled to have identified Reading Plus as an exciting platform in the supplemental literacy assessment and instructional space.

Big Blue Marble Academy (“BBMA”), our platform investment in the early childhood education space (“ECE”), has grown from 21 to 33 community-based schools and from 5 to 6 public elementary afterschool programs.  The company has completed 4 acquisitions year-to-date and is set to launch 3 new greenfield schools in the coming months.

Academic Programs International welcomed Rick Cabrera as Chief Financial Officer, and Amerigo Education welcomed Celia Stokes as a member on its Board of Directors.  For the fourth time in a row, Panopto was named a leader in Gartner’s Magic Quadrant for Enterprise Video Content Management.

Investment Area Focus

We continue to seek investment opportunities across the entire education and workforce spectrum. We look for fresh approaches where our growth capital, creative thinking, and relationships can make a difference in businesses achieving profitable scale and positively impacting the markets they serve. Below we highlight a few targeted themes:

  • K12 Technology-Enabled Services & Specialty Schools – Both inside and outside the classroom, our public and private K12 school system has the ability to drive efficiency and leverage software advancements to improve administration and learning outcomes. Further, we now have the ability to provide more tailored programmatic solutions to students in need of something different or more specialized than what currently exists in their community. We see an increased need for specialty schools, more personalized after school enrichment programs and/or multi-modality instructional offerings to reach students in more engaging and contemporary ways.
  • Partnership Models in Support of the U.S. Higher Education System – As higher education leaders look to the future, significant demographic challenges, exacerbated by a nation-wide reduction in birthrates, complicates the financial stress faced by many higher education institutions. We see an important role for private capital as an engine of innovation that can help drive efficiencies and expand an institutions’ addressable market through “program management,” “enablement,” and other forms of partnership models that drive student flow and services aligned to admissions and completion mandates.
  • Employer-driven Education and Training Models – Whether in technology, healthcare, or other industry verticals, there is a demonstrable shift in employers staking an ownership claim (and willingness to fund) the creation of their own talent supply chains. We see a convergence between the education, training, and human capital management sectors as this large addressable market continues to undergo transformation. Contemporary technologies and solutions are increasingly available to better support bespoke workforce creation, engagement and mobility strategies.
  • Advancing Student-driven, high ROI Programs – The economic and social disparity between college grads and everyone else is at a record high, yet a traditional bachelor’s degree is not for everyone. Student-funded alternative degree programs are not new, but to achieve sustainability and scale, programs must deliver on a compelling value proposition, provide affordable financing solutions, and illustrate the pathways for career entry and progression in targeted fields or geographies.

People Highlights

Already a trusted advisor and colleague, Ofa Stead officially joined our team in July as Operating Partner, Talent & Leadership. Ofa will collaborate with our investment team and portfolio partners on talent, change management, and workplace culture strategies.

Joe Shroyer joined our investment team on August 1st as an Associate. Joe had previously held posts at Goldman Sachs in their Strategy Group and at Citigroup in their Investment Banking Group. 

We congratulate Shawn Domanic and Shoshana Vernick for their recent recognition. Shawn was named a 2019 Rising Star of Private Equity, and Shoshana was named one of Crain’s Notable Women in Finance.

We hope you enjoy the last few weeks of summer!

The Education Opportunity Fund Team

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