Development Partners International invests $20 million in African university

London-based Development Partners International to make a $20 million investment in for-profit education in Africa.  

London-based Development Partners International is making a $20 million equity investment in Universite Privee de Marrakech (UPM), a private for-profit university in Morroco.

The investment will come from the African Development Partners II Fund which focuses on investing in companies targeting the emerging middle-class in Africa.

Capital Trust acted as the financial advisor to the transaction.

UPM intends to use the investment to expand into Sub-Saharan Africa. UPM is a for-profit, private university that claims a 90 percent graduation rate. Private equity firms worldwide are starting to back more for-profit education enterprises like UPM despite a growing debate over their ability to provide high quality education.

Laureate, one of the largest for-profit educators is based in Latin America and is backed by KKR. Leeds Equity Partners is invested in Education Management Corporation (EDMC), the second biggest for-profit college company, and EduK Group according to its website.

In the US, for-profit universities are slated to challenge the federal government in court over the “gainful employment rule” which would limit financial aid assistance to educational institutions where student’s debt to income ratio eclipses a certain threshold. The proposed rule is designed to help ensure that students who barrow money for tuition at for-profit entities end up with viable employment. The rule also aims to weed out schools claiming to provide credentials for specialized professions, but are in many cases unranked, or lack other key components of the accreditation process for those professions. The rule is facing criticism from the schools and their backers as being too onerous when it comes to tracking student financial data.