Chicago private equity firm Sterling Partners has closed an education-focused private equity fund with $200 million in commitments.
The fund, Education Opportunity Fund, was launched in partnership with sole limited partner USA Funds, a nonprofit that aims to help students finish college and find careers. Sterling says the fund will focus on companies that provide services to the higher-education market, as well as education technology businesses.
As many colleges and universities face pain points they are unfamiliar with, such as declining enrollment and inflexible cost structures, Sterling saw an opportunity to invest in businesses that help schools with some of those problems, according to managing director Jason Rosenberg.
"A number of [schools] have been struggling over the last few years given certain market dynamics, so with these trends, we thought it was a perfect time to partner with USA Funds and launch this fund," Rosenberg says.
In addition to businesses focused on universities, the fund will also consider investments in K-12 and corporate training businesses, Rosenberg says, and will continue Sterling's history of control investing.
This is Sterling's first sector-focused fund, though the firm has made many education investments before, and will continue to make them out of other funds, according to Rosenberg. Education Opportunity Fund will make smaller investments, Rosenberg says. Senior managing director Chris Hoehn-Saric and managing directors Shoshana Vernick and Rosenberg will lead the fund.
Sterling's education investment history includes Ashworth College, Educate Online, Laureate Education Inc. and School of Rock. The firm also invests in health care and business services companies.
In January 2014, Sterling bought Q-Centrix LLC, a provider of outsourced health care data-collection services. Also that January, the firm closed a deal for e-commerce services provider Innotrac Corp.
For more with Sterling, watch our video interview with senior managing director Rick Elfman.