Kaizen Global, a newly established private equity firm based in Mumbai, is targeting commitments of between $100 million and $150 million to make investments in India’s education sector.
The firm began fundraising in January and has garnered soft commitments of about $7 million, said Reema Shetty, a managing partner at Kaizen.
The Kaizen Education Fund will make controlling investments in about 8 to 10 schools and a smaller number of private higher education institutions.
“Making control investments is important as it brings a level of transparency which is very important where you need to control the quality of the product, in this case education,” Shetty said.
She added that the greatest asset that India has is its people and that the fund aims to find ways to prepare Indians for the global workforce. “Education in India is an undercapitalised sector, both in terms of money, as well as in terms of the quality of human capital,” she said.
The education fund will focus on investments in private K-12 schools, higher education institutes and education services companies. “These are the more interesting segments to invest in. They have the biggest needs and are also the most challenging sectors to invest in as there are a lot of regulatory issues that come
Education in India is an undercapitalised sector, both in terms of money, as well as in terms of the quality of human capital.
into the way of making the right level and the right kind of impact; yet there is an opportunity,” Shetty said.
She added that the firm already has an existing pipeline of deals.
The fund currently has three managing partners. They include Shetty, Akhil Shahani and an unnamed individual.
Shetty is the executive director of the NMC Group of Companies in Abu Dhabi, which has interests in healthcare, education, hospitality and financial services. A Shetty family member is the chairman of the Abu Dhabi Indian School.
Shahani is the managing director of Smart Institute, which localises international college coursework for India. The Shahani family runs a charitable trust called the Shahani Trust, which manages an engineering college in Mumbai. Its trustees are also on the board of the Hyderabad National Collegiate Board, which manages 22 colleges around Mumbai.
The third managing partner has more than 15 years of investment experience at venture capital and private equity firms.
Jetu Lalvani, currently the treasurer of an international school in Mumbai and the vice president of Jai Hind College, also in Mumbai, is the director of operations for the fund.
Shetty expects the fund to see a first close by August and a final close in about 18 months.
India's rapidly increasing per capita income has led to an increase in the demand for education, both in terms of the number of educational institutes, as well as the quality of education. While the Kaizen Education Fund is likely the first Indian private equity fund focused on investments in the sector, there are other private equity firms such as Avigo Capital Partners and Matrix Partners with broader investment mandates that invest in education as well.