A top-tier Japanese private equity fund has entered into a joint shareholding agreement with iae Global Group, one of Korea’s leading education recruitment companies with almost 50 branches around Asia, the US, Australia, Canada and the UK.
Tokyo-based New Horizon Capital (NHC) announced the agreement this week to invest in iae Holdings, iae Global’s operations outside of Korea. It also outlined a three-stage plan to increase the company’s value including expanding operations in Japan, M&As in other Asian markets including Vietnam and India and reinforcing onshore recruitment in destination countries.
“There are many PE firms that have invested in the institutional side but just a few have funded investment in the recruitment sector”
Established in Korea in 1992, iae Global Group is part of parent company EduHouse Inc whose main shareholder is CEO O.J. Kim. According to the company it places some 20,000 students annually in a network of 700 education institutionss.
Kim said the deal comes after a decade-long search to find a strategic partner to give the business more leverage to expand outside Korea and improve its global IT network.
“I have become aware of the important role investors in this industry can play to help us overcome difficulties due to mainly limited funds for expansion,” he told The PIE News. “There are many PE firms that have invested in the institutional side but just a few have funded investment in the recruitment sector.
“We felt global growth was limited just through the franchise partnerships which iae has developed over the last 10 years in Korea and many other countries,” he added.
Under the agreement, the company will retain iae Global branding and Kim will maintain his position as CEO of EduHouse.
“The deal means iae’s key partner institutions will have a more stabilised student recruitment channel worldwide and more developed and advanced business services provided by iae in many more countries,” Kim said.
Speaking with The PIE News, a spokesperson for NHC said the company had been actively looking for a partner to move into the education sector as Japanese government and industry invest to support outward looking education reform.
Last year Prime Minister Shinzo Abe allocated around £284mn (￥43.2 billion) toward education initiatives including improving universities’ ranking status and boosting academic collaborations.
“As a private equity investor we believe that there is a need for sophisticated networks and infrastructure to deliver education across national boundaries”
Financial support will also be made to double the amount of Japanese students at overseas universities to 120,000, overseas high schools to 60,000 and attract 30,000 foreign students to the country by 2020.
“Educating Japanese who can work in and lead in multi-lingual and multicultural environments is an urgent challenge for Japan,” the spokesperson said.
“As a private equity investor we believe that there is a need for sophisticated networks and infrastructure to deliver education and educational content across national boundaries, including by linking education consumers and providers across borders.”
In a statement, NHC said in addition to developing over-seas education in key English-speaking markets it also aims to help students broaden career options after graduation.
“The company will introduce a variety of curricula, offer counselling opportunities to which students can have easy access, standardise and develop quality counsellors to guide students,” it said.
Established 12 years ago, NHC specialises in buy companies with mid to small market capitalisation. According to the statement it has a cumulative assets under management of around £1.3bn (￥230bn).
