Oakley Capital extends IU Group partnership

Oakley Capital Investments Limited

17 May 2023

 

17 May 2023

Oakley Capital Investments Limited

Further to Oakley Capital Investments' ("OCI")¹ RNS announcement on 10 May 2023 regarding Oakley Capital Fund III's sale and reinvestment in IU Group, Oakley Capital² has published the following press release.

Oakley Capital extends IU Group partnership with continuation vehicle

Oakley Capital ("Oakley") is pleased to announce it has raised a continuation fund to extend its partnership with IU Group ("IU" or "the Group"), the largest and fastest growing university in Germany and a global leader in education technology. Oakley's continuation fund, backed by investors including TPG GP Solutions, HarbourVest Partners, Goldman Sachs Asset Management, Glendower Capital and Pantheon, is acquiring the business alongside Oakley Capital Fund V from Oakley Capital Fund III ("Fund III"). The business has performed significantly ahead of its original investment case and Fund III will realise a gross return of 85% IRR on its exit subject to completion.

The transaction extends Oakley's successful partnership with IU Group and its senior management which began with its investment back in 2017. Oakley's continued ownership and control of IU in combination with the leadership team running the business will ensure the long-term delivery of the Group's vision to democratise education globally. IU is a digital disruptor in the very large and structurally growing higher education market, providing high quality, flexible and affordable online learning to adults and high school leavers. The Group was an early adopter of artificial intelligence, successfully leveraging AI tools including early 'natural language processing' to scale its offering, and improve learning delivery and engagement with students. IU has the highest form of state accreditation in Germany and recently added separate U.K. and Canadian accreditations to its portfolio.

Oakley has supported IU with investment in talent acquisition by leveraging its network to broaden the Group's management team, as well as investing in student outcomes and marketing excellence. Significant investment in technology has enhanced IU's IT delivery platform, enabling it to accelerate and scale every step in the value chain, from content creation to marketing and learning delivery. The Group has also hired more professors and opened new campuses to support blended teaching.

These investments have helped deliver strong student outcomes and increased enrolments. Student numbers have grown from 15,000 in 2017 to over 100,000 today. IU's unique, digital platform now offers 350 accredited bachelor and master courses, representing the largest portfolio of degree programmes worldwide. IU has achieved an industry leading Net Promoter Score of 50+ and best-in-class student retention and outcomes.

IU are democratising higher education by making it accessible to all: 70% of IU students come from non-academic backgrounds and the Group offers thousands of scholarships every year to students from disadvantaged backgrounds and developing countries. In keeping with its commitment to ESG, the business is working towards becoming a B Corp company.

IU Group is now on track to deliver c.€500 million in revenues in 2023. Oakley's renewed partnership with IU will drive the next phase of the Group's growth, with continued growth in existing markets, accelerated internationalisation driven by organic growth and acquisitions in key geographies. IU already offers more than 70 English language accredited bachelor's and master's degrees and will expand the portfolio over the next phase. IU is also leveraging the power of Artificial Intelligence as the first global university to deploy an AI-powered teaching assistant across all its English programmes in order to enhance the individual learning journey for students.

CEO Sven Schütt said: "We are pleased to continue our partnership with Oakley which will help us drive the next phase of growth and continue our vision to democratise education across the globe. We are excited by the tremendous opportunity to further scale our business in our core markets as well as internationally. We are also convinced that AI will be a game-changer by enabling us to empower our students with the most personalised education."

Oakley Capital Managing Partner and co-Founder Peter Dubens said: "Sven and his team have redefined modern university education. They have consistently delivered on their ambitious targets, improved student outcomes, innovating with AI driven delivery, and expanding into new verticals and geographies. We are excited to continue to support IU as the Group accelerates its international growth."

Lazard acted as sole financial advisor to Oakley Capital in connection with the transaction.

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For further information please contact:

Oakley Capital Limited

[phone]

Steven Tredget

Greenbrook Communications Limited

[phone]

Rob White / Michael Russell

Liberum Capital Limited (Financial Adviser & Broker)

[phone]

Chris Clarke / Darren Vickers / Owen Matthews

Notes:

LEI Number: 213800KW6MZUK12CQ815

¹ About Oakley Capital Investments Limited ("OCI")

OCI is a Specialist Fund Segment ("SFS") traded investment vehicle that aims to provide shareholders with consistent long-term capital growth in excess of the FTSE All-Share Index by providing liquid access to private equity returns through investment in the Oakley Funds.

A video introduction to OCI is available at https://oakleycapitalinvestments.com/videos/

The contents of the OCI website are not incorporated into, and do not form part of, this announcement.

² Oakley Capital, the Investment Adviser

Founded in 2002, Oakley Capital Limited has demonstrated the repeated ability to source attractive growth assets at attractive prices. To do this it relies on its sector and regional expertise, its ability to tackle transaction complexity and its deal generating entrepreneur network.

The Oakley Funds

Oakley Capital Private Equity L.P. and its successor funds, Oakley Capital Private Equity II, Oakley Capital Private Equity III, Oakley Capital IV, Oakley Capital V and Oakley Capital Origin Fund are unlisted lower-mid to mid-market private equity funds that aim to provide investors with significant long-term capital appreciation. The investment strategy of the Funds is to focus on buy-out opportunities in industries with the potential for growth, consolidation and performance improvement. The Oakley family of funds also includes PROfounders funds, which are venture capital funds focused on investments in entrepreneur-led, private businesses across Europe.

Important information

Specialist Fund Segment securities are not admitted to the Official List of the Financial Conduct Authority. Therefore, the Company has not been required to satisfy the eligibility criteria for admission to listing on the Official List and is not required to comply with the Financial Conduct Authority's Listing Rules.

The Specialist Fund Segment is intended for institutional, professional, professionally advised and knowledgeable investors who understand, or who have been advised of, the potential risk from investing in companies admitted to the Specialist Fund Segment.

This announcement may include "forward-looking statements". These forward-looking statements are statements regarding the Company's objectives, intentions, beliefs or current expectations with respect to, amongst other things, the Company's financial position, business strategy, results of operations, liquidity, prospects and growth. Forward-looking statements are subject to risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future.  Accordingly the Company's actual future financial results, operational performance and achievements may differ materially from those expressed in, or implied by, the statements. Given these uncertainties, prospective investors are cautioned not to place any undue reliance on such forward-looking statements, which speak only as at the date of this announcement. The Company expressly disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect actual results or any change in the Company's expectations with regard to them or any change in events, conditions or circumstances on which any such statements are based unless required to do so by the Financial Services and Markets Act 2000, the Listing Rules or Prospectus Regulation Rules of the Financial Conduct Authority or other applicable laws, regulations or rules.

 

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