Sovereign Capital is a UK private equity fund. It invests in companies in the following sectors: 'support services', healthcare, and education.
Privatising education and reputational risk
A third of Sovereign Capital's investments are in the education and training sector.
‘For us, it has been a tremendous sector', Michael Needley, who leads Sovereign Capital's education team, told a room of investors at the 2015 EducationInvestor summit. 'I think we're in a very interesting time in how education is going to develop, who is going to be involved, and who is going to be a part of that,' he added.
Needley described the K12 market (Kindergarten to 12th Grade, or primary and secondary school) as a $34bn opportunity. 'My gosh that's lots for everybody,' he said. 'Let's all go forth. Let's all make hay.'
Needley identified online education as the big opportunity for investors. 'This is the silver bullet: who is going to crack the online market,' he said.
However, he also identified reputational risk to firms as the biggest concern. 'We're putting our head above the parapet,' he said, adding: 'There are people out there looking for it.' He said that they were taking 'a lot of our learnings' about how to handle reputation risk from the healthcare sector. Of the two sectors, healthcare was the first to be privatised.
Sovereign Capital's education investments include:
- Astrum Education Group: group of private sixth form colleges in London
- GSM London: HE provider
- World Class Learning Group (WCL) (realised in 2013): London-based international schools group; sold to Nord Anglia Education.
- Alpha Plus Group (realised): private school chain.
- Employability and Skills Group (sold 2012)
Other investments it has made include:
- DC Leisure: manages council leisure centres
- National Fostering Agency: Sovereign Capital is one of the largest suppliers of fostering services.
NHS service providers:
It reportedly made about £100 million from its involvement in the buying, reselling and consolidation of social care businesses.
- John Nash, co-founder. In 2013 Nash was elevated to the Lords and made Education Minister by Michael Gove. Nash is now responsible for free schools and academy policy. He agreed to step away from all relevant business interests while a Minister.
- Ryan Robson, co-founder. Has given the Conservative Party more than £250,000 in the past five years. Robson stood as a Tory parliamentary candidate in the 2010 election.
- Michael Needley, leads the education and training team.
- Andrew Hayden, managing partner.
- Neil Cox, formerly of Rothschild
- Jeremy Morgan, formerly of Barclays Ventures
Website: http://www.sovereigncapital.co.uk Address: 25 Victoria St, Westminster, London SW1H 0EX