As one of our Investment Business Units (IBU), Impact Investing is committed to generating financial returns while fostering positive social and environmental outcomes. At Old Mutual Alternative Investments, we regard education as a key focus area. As a result, we manage two funds in this space: the Schools and Education Investment Impact Fund of South Africa (SEIIFSA) and the Education Investment Impact Fund of South Africa (EduFund).
The funds have a dual mandate: to achieve both a risk-adjusted return on investment and have large-scale social impact by improving access to affordable, quality education. We aim to achieve this by applying bespoke funding structures of both debt and equity to create education infrastructure, while also supporting the early-stage working capital requirements of schools.
To date, Impact Investing has been instrumental in funding 43 schools and more than 24,000 learners, of whom over 98% are black students. The funds track several metrics, including Matric results, employment data (permanent and temporary), transformation and demographic metrics (teachers, management, other staff and learners), and school fee collection rates and environmental impact (including energy and water efficiency).
IMPACT IN ACTION
Impact Investing is one of a handful of players in the market that invest in greenfield school infrastructure. In addition, we create a bespoke capital structure and repayment profile that works for the school and operator and meets the commercial objectives of both SEIIFSA and EduFund. At Old Mutual Alternative Investments, we believe the following examples reflect the impact our IBU is making in South Africa’s education sector:
ROYAL SCHOOLS
Established in 1993, Royal Schools was one of the first affordable private schools in South Africa. In 2012, Royal Schools partnered with SEIIFSA to expand its educational footprint. SEIIFSA approved a Phase One investment of R78.5 million for the redevelopment and expansion of the Queens and Princess Park schools in Pretoria’s inner-city, as well as the development of a large greenfield school in Alberton. In 2016, a second investment phase of R267 million was approved. The Amberfield College investment was approved in 2017, and presently, the total approved investment is R372 million. Thirty-one years since the first Royal Schools institution opened its doors, there are now 10 schools based on five campuses, with 6,500 learners and 418 full-time staff members. The group has implemented solar energy solutions across three of its five campuses, ensuring that the quality of education provided during loadshedding is not compromised, while also contributing towards reducing the group’s carbon footprint.
SUPPORTING NEW AFFORDABLE SCHOOLS
Due to certain constraints affecting the establishment of new affordable schools, EduFund has strategically moved to the creation of platforms. These platforms improve viability while also derisking the development of affordable greenfield schools. This is achieved through unlocking economies of scale on operational costs thanks to the creation of fully capacitated operational teams. By contrast, single school deals struggle to absorb the management fee required to cover all the competencies essential to the success of a new educational institution. Through a mix of operational assets and greenfield assets, EduFund’s approach offers diversification across market segments, phases of operations and risk profiles. The first platform has already been established and is 100% owned by EduFund. This approach enables EduFund to drive transformation and skills development in the sector. It is also a key strategic initiative enabling our fund to deploy teams to help turn around underperforming schools.
BASA EDUCATIONAL INSTITUTE TRUST
The BASA Educational Institute Trust, a 100% black-owned and -managed school organisation, was founded in 1992. The trust’s focus lay in delivering high-quality, low-fee schooling to children from previously disadvantaged backgrounds in Johannesburg.
In 2012, Old Mutual Alternative Investments - through SEIIFSA - committed R60 million towards the renovation of the existing Protea Glen Primary School and the development of the Protea Glen Combined School (primary and high school), which opened in 2015. The three schools have a combined capacity of 2,866 learners. Today, the trust owns and operates five schools in and around Johannesburg, employing 270 educators and serving approximately 6,500 students. BAS charges the lowest fees across both of our funds.
The investment in BASA was structured to return 100 controlling rights to the BASA Educational Institute Trust. With SEIIFSA exiting the investment at the end of May 2025, full ownership of the schools will soon be in BASA’s hands, leaving them financially and operationally able to sustain and grow their business.
INVESTING IN UNDERSERVED MARKETS
Working in partnership with a 100% black-owned local education operator, Mr Piyuse Thomas, EduFund has invested R71 million towards the development of two new independent schools in East London. Collectively, the schools will be known as St Joseph’s College. The first phase commenced in March 2022 for launch in 2023, and the second phase was completed in 2024/2025. The schools’ aim is to accommodate 1,120 learners, addressing the demand for quality education in the underserved East London market.