Cerestra Advisors forays into school management and operation business

Cerestra Advisors Private Limited, a real estate and education assets focused private equity firm, plans to invest around $100 mn in mid segment schools in tier I and II cities to bail out institutions facing financial difficulties due to Covid-19 pandemic, said a senior official of the fund.

The fund recently entered into a joint venture agreement to invest and run two schools from builder Kolte-Patil even as the fund has already onboarded 15 schools since September, 2020.

“With a projected top-line of over Rs 100 crore. It is our endeavour to touch over 25,000 lives with a network of 50 schools by the coming academic year,” said Jasmeet Chhabra, Managing Partner, Cerestra Ventures.

The joint venture marks entry of the Crimson brand owned by Cerestra into Pune market.

“We will aspire to grow to over 5 schools in the next 2 years to be the most recognised regional brand in our cities” said Ankita Patil Lunkad, managing trustee of Anisha Education Trust.

The outbreak of Covid-19 has created a major displacement in the education sector in India specifically affecting the mid- range standalone schools in the fee range upto Rs. 100,000 pa.

With fees drying up and fixed expenses continuing unabated, the Covid-19 related displacement will affect over 1000 high quality private schools across the country creating a $1 Bn M&A opportunity in the sector, according to experts.

“While the opportunity is immense, patient capital willing to back the sector for the next 18-24 months will be a key beneficiary given the long term robustness of the K12 business model,” said Chabbra.

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Under its education vertical, Cerestra has a portfolio of US$160 mln, with committed capital to build an additional portfolio of $150 million.

Crimson Education Management Services (Crimson) platform looks to establish a leadership position for end to end management of K12 schools in the Mid-Market segment.

The initiative is led by Francis Joseph, former COO, Ryan International School and Farzana Dohadwala, a former International Baccalaureate representative for South Asia.

Crimson will follow an asset light operation and management business model as it scales up.

“We plan to monetise the underlying infrastructure of the schools through our Edu-Infra funds which we plan to list as an INVIT in the marketplace,” said Vishal Goel, Partner, Cerestra Ventures.



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