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Jan 16 – Jan 22, 2012 Edition New Bertelsmann Fund Backs Innovative Education
Gütersloh/New York, January 17, 2012 Bertelsmann, which owns Random House in the US, has teamed up with other prominent investors and education entrepreneurs to launch the University Ventures Fund I, L.P.. The fund focuses on forming partnerships with leading universities to jointly develop and deploy innovative higher education programs in Europe and the U.S. These models combine the entrepreneurship, capital and management expertise of the private sector with the academic integrity, quality assurance processes, and brands of traditional institutions. Education service models are rapidly entering mainstream higher education on a global basis and include
collaboration in areas such as online education, marketing & technology services and administrative support.
University Ventures has a committed capital fund of over 100 million USD. It is managed by a group of experienced higher-education investors. Six to ten individual education investments in Europe and the U.S. are planned for the first few years, several of which have already been initiated.
The partnership with University Ventures secures Bertelsmann’s early entry into a fast-growing sector being transformed by fiscal retrenchment and advances in digital technology. These changes create huge opportunities for entrepreneurs, investors and strategic players to play a transformative role in higher education. Bertelsmann may also make targeted direct investments as part of its cooperation with University Ventures. Via its investment in UV, Bertelsmann aims to build scalable, leading education platforms in its core markets of Europe and the U.S. in the years ahead, keeping its capital commitment and risk manageable.
Bertelsmann’s Chairman & CEO Thomas Rabe stated: “Education in general, and services for educational providers in particular, represent a promising and custom-made opportunity for a global media and services company like Bertelsmann. Mega-trends such as the emergence of new digital technologies and the growing role of the private sector open up vast opportunities for us, which we expect to take full advantage of through University Ventures. We are expanding into a new high-growth business, and after a careful analysis of the market, deliberately opted for an entrepreneurial concept that relies on building the business gradually. At Bertelsmann, entrepreneurial ideas become reality; the partnership with University Ventures is an excellent example.”
With an investment of 50 million USD, Bertelsmann is the anchor investor alongside a selected group of value-added Limited Partners, such as the University of Texas Investment Management Company (UTIMCO).
“Bertelsmann chose to work with University Ventures because the team has a demonstrated track record of envisioning new business models and building successful education ventures while respecting traditional academic institutions. In combination with Bertelsmann’s profound media and services expertise, this leads to a real win-win situation,” said Rabe, who also chairs the fund’s investment committee.
The fund’s managers are Ryan Craig, the founding Director of Bridgepoint Education (NYSE: BPI), Daniel Pianko, the first outside Director of Altius Education, and David Figuli, former general counsel to two state university systems, as well as Gregg Rosenthal, an education expert from Bertelsmann.
University Ventures’s Daniel Pianko said: “To address structural changes in higher education that will occur in the U.S. and EU over the next 5-10 years, University Ventures plans to build transformative education service organizations that partner with highly regarded institutions to develop better outcomes for students at a lower cost. Given Bertelsmann’s 175+ year history and expertise in high quality content and services, we can’t think of a better partner to help University Ventures develop learning solutions for the 21st century.”
Initial investments include a partnership with Brandman University, a prestigious private university in California and part of the Chapman University System that provides undergraduate and postgraduate programs for working adults. University Ventures and Brandman are working to establish a new college which will improve the Hispanic population’s access to higher education. Dual-language (Spanish-English) degree programs will attract and engage the
Hispanic student population, making English proficiency an equally important learning objective in all of their academic subjects. This unique program will cater to the high demand for custom educational offerings among the rapidly growing and largest minority in the United States.
In Europe, University Ventures has established a new company, Higher Education Online, that is partnering with leading European universities to bring undergraduate and postgraduate degree programs online at the highest level of quality with academic and other tailored support for students. This allows the universities to make their programs available to adult learners in their respective home countries as well as abroad.