October 31 2023
Veld Capital, a private credit and real estate specialist investor has sold education-infrastructure assets in India to an international private equity investor.
Following the first investment of an established boarding school in Bengaluru in 2019, Veld
provided liquidity solutions and helping to optimise capital structures for operators of schools. At the
time of exit, the portfolio comprised nine K-12 school and student housing assets, with a total built up area of 1.6m square feet and total enrolment in excess of 11,000 students.
Partnering with JV Ventures, an investment firm focused on social infrastructure assets in
India, the investment strategy targeted the highly fragmented market for paid-for K-12
education in India, underpinned by a rapidly growing middle class and the
demand for high quality education.
India represents the largest private K-12 market globally with more than 250-million students, driving a significant capital requirement for education infrastructure.
As part of the strategy, Veld acquired assets of established schools and colleges,
with the real estate then leased back to operators on long-term triple-net leases, providing
an annuity-like income stream backed by a highly sustainable revenue base. Despite
schools being closed for prolonged periods during the Covid-19 lockdowns, underlying asset
performance remained robust, with rent received in full, driven by intense competition for
school places and a clear parental intent to continue to secure their children’s education.
Building on its longstanding track record as a solutions provider and capital partner on the
leading edge of private markets across Europe, Veld acquired and institutionalised the
portfolio in partnership with JV Ventures.
The exit showed Veld’s ability to source and aggregate attractive, defensive assets in the mid-market, but also to scale a thesis over time in order to attract appetite from larger institutional investors.
Veld, which has successfully raised over €2.7bn since inception of its credit strategy in 2009,
combines an opportunistic, mid-market focus with localised origination, underwriting and
asset management expertise. This is supported by a platform, with 50 full-time professionals based across six offices in London, Madrid, Milan, Lisbon, Luxembourg and Mumbai.
Rakesh Balasundaram, Managing Director at Veld Capital said: “The effective execution of this strategy demonstrates our ability to extend Veld’s successful track record outside of Europe for the first time. As now one of the most populous and consistently high growth economies in the world, India represents a compelling long term investment opportunity, with few players bringing the capabilities and focus to providing structured funding solutions in what is an under-developed mid-market, building directly on
our extensive experience in Europe and now established Indian team.”
Jasmeet Singh Chhabra, Co-Founder at JV Ventures said India was experiencing a paradigm shift towards rapid urbanisation, creating primary opportunities for social infrastructure and services.
“JV Ventures continues to build a differentiated opportunity in institutionalising social infrastructure investing. Our successful partnership with Veld in creating a robust K-12 investments ecosystem is a testament to the immense opportunities the sector has to offer,” Singh Chhabra said.
Harsh Doshi, Investment Director at Veld Capital said:
“Looking to 2024, we are continually seeking new investment opportunities on the ground in
India as well as partnerships with specialist operators. We now look forward to progressing
our strong origination pipeline already in place and investing across developing themes in
mid-market real estate and credit.”
alistair@propertyflash.co.za
