- Dario Cipriani, CEE Equity Partners

Tertiary education plays an important skill-forging role, in building the kind of human capital that allows countries to get ahead in the expanding knowledge economy and the hunt for talent. While most of continental Europe considers universities a public good, i.e., an educational social responsibility, with attendant low costs for the local/EU student populations, there are a number of countries that have developed university education into a thriving service industry.

              While we are mostly aware of the Anglo-Saxon precedents (USA, UK first and foremost), private universities focused on practical job-relevant skills have also blossomed as an industry in Brazil and China, to mention two global leaders.

In several countries private institutions are already service a majority of higher education students.

Since private equity has spotted this demographic trend, a number of PE-supported education groups have also prospered across Europe, with France a leading country, and CEE still catching up to that trend.

It was therefore a pleasure for the Warsaw-based LF team to assist the outstanding Budapest-based management team of Hungary’s leading private business and arts school, Metropolitan University (https://www.metubudapest.hu/) with nearly 7,000 students, to find a new strategic partner to take over stewardship of the business from our client, private equity and infrastructure fund CEE Equity Partners (http://cee-equity.com/).

LF appreciated the trust and confidence placed into our team by CEE Equity Partners to take on the task of selling a regulated business in a country that has recently been in the headlines for the wrong kind of reasons, and in an industry that we had limited prior experience in -- but one on which we quickly read-up on in preparation for this mandate’s execution.

The pandemic had reaped havoc on the business models of many universities, with the move to online teaching a huge challenge for educators, administrators, and students alike. Questions were raised about the future of higher education models, which we also needed to understand and answer in the context of Metropolitan University’s medium-term business outlook.

Long-term shifts in Higher Ed as a result of COVID-19:

Key questions surrounding US HE enrolments and institution budgets for the 2020-21 academic year:

It is a truism in finance that a company is only as good as its management team. Well, Metropolitan University, headed by its accomplished and surefooted CEO, Agnes Toth its inspirational Rector Dr. Balint Bachmann ( https://www.metubudapest.hu/leadership-of-the-metu),  and her all-Hungarian team of enthusiastic and experienced educators and managers, made the job of finding new owners willing to pay up for this quality asset a pleasant job.  Metropolitan University has utilized the challenge of the pandemic to accelerate its transformation and development, improving every KPI in the book and exhibiting stellar financial results.

The transaction was successfully completed in mid-2021 by the transition of METU’s ownership to a Hungarian fund Optima Investments Ltd. (http://optimabudapest.hu/cegunkrol/), which is committed to promoting education in Hungary, for more details see the CEE Equity press release below:   

http://cee-equity.com/sale-of-budapest-metropolitan-university-metu/

www.globallegalchronicle.com/optima-investments-50-million-acquisition-of-budapest-metropolitan-university/

Tertiary education is a key facilitator of social mobility and allows young people to acquire the necessary skills to compete in today’s very competitive global job market. We trust that Metropolitan University will continue to do a fine job for its students also under the trusteeship of Optima Investments. Education is also the surest way to promote transparency, accountability, liberalism of thought and freedom of expression. We wish Hungary all the above, given its impressive freedom-fighting credentials alongside Poland. Poland and Hungary share a special bond and are sometimes called ‘brothers’ in local folklore. Both have a strong anti-totalitarian pedigree, with Hungary’s 1956 uprising against one of the first against the socialist tyranny, and Poland’s of 1989 the last to trigger the liberation of Central and Eastern Europe from the Soviet socialist yoke and pave the way for freedom and democracy to prevail.

More details with regard to Budapest Metropolitan University transaction are available in this presentation.