Bank of Amer­ica Mer­rill Lynch south­ern Africa pres­i­dent quits to of­fer his skills in a new area – af­ford­able pri­vate school­ing. This, he be­lieves, is the way of the fu­ture

CityPress - - Business - MARCIA KLEIN marcia.klein@me­dia24.com

Les­lie Maas­dorp quit as south­ern African pres­i­dent of Bank of Amer­ica Mer­rill Lynch in March. Af­ter 13 years in fi­nance, he wanted to move on. This was af­ter pri­vate ed­u­ca­tion group Ad­vtech, of which Maas­dorp was chair­per­son, em­ployed a search firm to find a re­place­ment for its chief ex­ec­u­tive, Frank Thomp­son. Thomp­son an­nounced that this year would be his last af­ter 11 years at the helm.

Maas­dorp says: “As they pub­li­cised the role, I started to think about whether to do it.” So he threw his hat in the ring and got the job. He is not nec­es­sar­ily an ob­vi­ous choice, with a back­ground in fi­nance and eco­nom­ics, but he is on the boards of both Ad­vtech and an NGO in­volved in ed­u­ca­tion. Maas­dorp be­lieves his in­ter­est in and pas­sion for ed­u­ca­tion, as well as his skills in fi­nance, will prove use­ful.

He knows the busi­ness, hav­ing been on the board since 2009 and chair since 2010. “You get to know the DNA, the busi­ness, the peo­ple,” he says. “I don’t need to spend four to six months get­ting to know where the cof­fee ma­chine is, or what the key chal­lenges are.”

From Oc­to­ber 24, he will pre­side over nu­mer­ous up-mar­ket pri­vate schools and col­leges in­clud­ing Craw­ford, Trin­i­ty­house, Vega and Var­sity Col­lege. Last year, there were 42 200 stu­dents at Ad­vtech schools and col­leges, 1 344 of whom passed ma­tric. The schools have a 100% pass rate.

Although it is not a huge com­pany, Ad­vtech and oth­ers are mak­ing sig­nif­i­cant in­roads in pri­vate ed­u­ca­tion as more and more peo­ple opt to send their chil­dren to pri­vate schools.

Some of these have been grow­ing faster than Ad­vtech, specif­i­cally the JSE-listed Curro, with which one can make im­me­di­ate com­par­isons.

Curro has 33 school cam­puses and more than 27 000 stu­dents, so it is smaller than Ad­vtech. But its growth has been phe­nom­e­nal. Last year, Curro’s rev­enue was up by 80% and its head­line earn­ings by 87%. Its share price in­creased 50% over the past year.

Ad­vtech rev­enue, in com­par­i­son, was up just 5% and its earn­ings 12%, and growth over the past five years has been up and down. The share price is 12% more than a year ago.

In this fast-grow­ing in­dus­try, nu­mer­ous start-ups are also in the wings. Chinezi Chi­jioke, the for­mer head of McKin­sey’s African ed­u­ca­tion prac­tice, has started Pioneer Aca­demics, which is set to open schools next year.

Spark Schools, which was started last year by Stacey Brewer and Ryan Har­ri­son, has some schools run­ning and a num­ber in the pipe­line.

Fees at these schools vary sig­nif­i­cantly. Ad­vtech is at the higher end. But the first item on Maas­dorp’s agenda is to ac­cel­er­ate growth, and this will be partly achieved by mov­ing into the lower-fee sphere.

Maas­dorp, who sup­ports pri­vate school­ing per­son­ally, and whose son was pri­vately ed­u­cated, says pri­vate ed­u­ca­tion is not just for elites, and “the fastest growth is in the low-fee pri­vate ed­u­ca­tion space”. It is also a mis­nomer that pri­vate ed­u­ca­tion is for whites only, he says. “That may have been the case in the past – to­day it has fun­da­men­tally changed.”

“The key is to strengthen growth into the af­ford­able low-fee space – a new in­dus­try that is mush­room­ing.”

The Ad­vtech board has de­cided “to launch and scale in the low-fee arena”, and Maas­dorp’s job is to drive it. The fee struc­ture is still un­der dis­cus­sion, but fees of around R2 000 a month are likely.

The­com­pa­ny­can­movein­tolow-feeschool­srel­a­tive­lyeasily as “we are an es­tab­lished player with a strong bal­ance sheet – we can scale any ini­tia­tive we are in­volved in. The cur­rent in­vest­ment pro­gramme is R3 bil­lion over 10 years, at least half of which falls into the low-fee pri­vate school cat­e­gory”.

Ad­vtech is also mov­ing out­side the border for the first time – tar­get­ing coun­tries where English is strong like Ghana, Nige­ria, Kenya and neigh­bour­ing coun­tries.

Ad­vtech has been crit­i­cised for its slow growth but Maas­dorp says this is be­cause new com­pa­nies in the sec­tor grow fast off a low base. “We have an es­tab­lished, more ma­ture com­pany.” He be­lieves he can con­trib­ute to ed­u­ca­tion in the coun­try through his new job. In emerg­ing mar­kets like South Africa, more and more peo­ple can af­ford qual­ity ed­u­ca­tion, he says. At the same time, the pub­lic sec­tor is less and less able to in­crease in­vest­ment in ed­u­ca­tion.

“We be­lieve pri­vate ed­u­ca­tion has an im­por­tant role to play in com­ple­ment­ing the pub­lic sec­tor. Al­most one in two pupils drops out of the school sys­tem and a mil­lion peo­ple be­tween the ages of 18 and 25 are not in train­ing in­sti­tu­tions. This is at the heart of the cri­sis around crime and so­cial co­he­sion.”

He plans to work with govern­ment, form new part­ner­ships and im­prove ed­u­ca­tion.

Another area of fo­cus is tech­nol­ogy, which can fa­cil­i­tate cost-ef­fec­tive ed­u­ca­tion. In In­dia, con­tent is loaded on to tablets, giv­ing a mul­ti­tude of pupils – who don’t even have ac­cess to the in­ter­net – ac­cess to the full cur­ricu­lum on iPad­like de­vices that cost $100 (R1 050) or less.

Bet­ter use of tech­nol­ogy pro­vides bet­ter ed­u­ca­tion, he says.



Les­lie Maas­dorp has taken up the

po­si­tion of Ad­vtech CEO

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