PSG hints at push into education
CAPE TOWN — Stellenbosch-based investment house PSG Group is hinting strongly at another concerted push into private education.
PSG, which reported interim results yesterday, has already tripled its money on its 57.1% investment in private school venture Curro Holdings (now worth about R3.3bn) since the end of February last year. At the end of February 2011, PSG’s investment in Curro was worth just R300m.
CEO Piet Mouton, however, believes PSG’s involvement with private education will not be limited to the fast-growing Curro.
Tucked away in PSG’s private equity division is a controlling stake in distance learning initiative Impac.
Not much commentary is reserved for the private equity interests in the latest interim results, but Mr Mouton reckoned Impac holds the biggest promise in that specialist portfolio. “Our estimate is that in the next 10 years Impac could have as many learners as Curro.”
Mr Mouton conceded that Impac did not earn the same fees per learner as Curro, which offers three tiers of “affordable” private schooling. “But there is a considerable advantage in that there’s no huge capital outlay needed to grow the learning centres.”
He believed Impac’s learning cen- tres could be rolled out rapidly using the same partnership model based on revenue sharing with an operator that PSG used to build up PSG Konsult’s sprawling wealth management network. “It’s early days. But we know that — for various reasons — 5% to 10% of learners don’t fit into traditional schools. If we get this right it could be a massive opportunity.”
PSG’s well-documented success in Curro and (to a lesser extent) financial services subsidiary PSG Konsult will also help dispel notions that the company’s fortunes are hitched solely to its investment in mass banking enterprise Capitec. The interim results showed the value of PSG’s investment in Curro had tripled from R1.1bn in February last year to R3.3bn, while the value of its holding in PSG Konsult had almost doubled from R1.5bn to R2.7bn.
Over the same period the holding in Capitec was static at R6bn.
PSG’s other major investments include a R1.7bn stake in agribusiness Zeder, a R964m holding in empowerment group Thembeka and a R700m interest in a private equity portfolio.