Investors look to snap up private providers as others merge

Private higher education institutions are increasingly looking at outside investment and mergers as a way to shore up their finances and expand in a competitive market.

A survey of Independent Higher Education members recently found that 15 per cent were looking at mergers and acquisitions and 41 per cent were exploring additional investment.

In general, private institutions have more access to investment markets than their public counterparts, with traditional universities generally limited from taking on equity by their charitable status. 

With much of the higher education sector facing financial challenges, partially brought on by rising costs and turbulent international student numbers, some private providers are looking to bring in money from elsewhere, according to Alex Proudfoot, chief executive of Independent Higher Education, the representative body for nearly 100 private providers. 

“It’s obviously good that the government provided some stability in terms of forecasting fee increases over the next few years, but there isn’t a lot of money to go around,” he continued.

“If you’re looking at pumping new money into the system, to improve outcomes and to improve facilities and to expand choice, I think that having those institutions which have access to private investment markets is a really important part of that mix.”

From the perspective of international investors, the UK’s higher education sector appears to remain appealing. 

In 2025, New York-based private equity firm Brightstar Capital Partners bought a 50 per cent stake in Coventry-based Arden University. 

The institution remains partially owned by Global University Systems, which also has stakes in institutions including the University of Law and the London College of Contemporary Music. 

Most recently, it reportedly made an offer to purchase the University of Buckingham, which is exploring investment opportunities after a difficult financial year. 

Meanwhile, Arizona State University announced it would be expanding to London, where it hopes to entice US students across the pond. 

“Despite its challenges, the UK higher education sector is still considered a really attractive market in which to operate for international players,” Proudfoot said.  

“There has been quite a bit of investment from outside the UK in UK higher education in the last few years, especially from European higher education groups who are looking into the market.”

For the Academy of Contemporary Music (ACM), a music and creative arts institution that includes Ed Sheeran and the 1975’s Matty Healy among its alumni, a buyout last year set the institution and its connected recording studio business free from a struggling parent company. 

Ash Kandhari, head of Rex Brown, the company that bought ACM, said he was keen to consider how the commercial aspects of his existing businesses could be applied in the education space.

“Our background is very much e-commerce, so it’s a totally different sector, but we are very commercially minded,” he said. “So how do we think about making the service that an education provider provides very relevant to the customers, which are the students?”

Under its new ownership, ACM plans to expand its short courses and hyper-specialised modules, such as social commerce. 

Acquisitions and takeovers are also helping the specialist higher education sector to grow. Last year, the University of the Built Environment completed a merger with the London School of Architecture (LSA). 

Ashley Wheaton, vice-chancellor of the University of the Built Environment, said the merger was not driven by financial precarity but as a way to allow the university to diversify its programme offering. 

For LSA, he said, the merger was appealing too as the relatively small institution faced the challenge of funding expansion on its own. 

“What we’ve been able to bring is capital for them to grow,” he said, adding that the University of the Built Environment invested about £1 million to help LSA expand in the first year of partnership. 

Wheaton said the university had been approached numerous times from “people interested in acquiring an [Office for Students] registered institution with degree-awarding powers – that’s the prize”. He said these prospective buyers included both international organisations looking to enter the British market as well as those that already operate in the UK higher education space. 

But, as a charity with a Royal Charter, Wheaton said he felt taking on private investment would be inappropriate for his institution.  

“The sector needs to be a bit mindful that bringing huge amounts of private equity funding in is a good thing, but at some point it needs to come back out with a sufficient return for those equity partners to feel really good about it,” he said.

He added that he believes there are risks to private investment for higher education providers because “once you’ve let that voice in and the money in, you have a slight loss of control, I think, and therefore maybe can’t direct the institution the way you would choose”.

helen.packer@timeshighereducation.com