Cerestra buys Pune school, Euro group to operate it under Billabong brand

Private equity fund Cerestra Advisors has acquired a K12 school in Pune as a part of their plan to build a portfolio of schools in the country and float an educational Invit (infrastructure investment trust).

Cerestra bought Billabong High International School in Hadapsar area of Pune for Rs 600 million through its Cerestra Edu Infra Fund, which presently owns a total of eight K12 schools valued at over Rs 4.5 billion.

The said school is spread across 2.25 acres of land and has a built-up area of 135,000 square feet with a capacity of 2500 students. The school is leased to the operator for a period of 30 years. 

Although global investors KKR and General Atlantic are reportedly looking to buy Eurokids and Billabong, Ceresta managing partner Jasmeet Chhabra said it was on the operations side, and they were buying the asset.

Cerestra has a total of eight such schools, which were bought and leased back to leading Indian chains including Jain Group of Institutions (JGI) in Bengaluru, Sancta Maria in Hyderabad and Witty International in Mumbai, among others. 

"Cerestra had launched its first Education Infrastructure Fund in 2016 with the objective of creating a first of it's kind Education Invit. The plan is to have a relationship with eight to ten leading school operators across India and have a portfolio of $70-100 million worth of assets with each of them," said Chhabra.

"We focus on the assets which have a long-term rental yield potential. This model also helps the school operators to monetize their assets to raise funds. In this structure, the operating business unlocks significant capital for expansion without needing to resort to debt. Staying asset light also results in a superior return on equity for the operators this creating a win win partnership," he said. 

Chhabra said they were closing their second education fund of $300 million which will start investing from the first quarter of next year.

Cerestra was started by Chhabra as part of Religare' global asset management business. The Capital Partnership, a global multi-family office with over $7 billion under management, partnered with the management team to buyout Religare from the venture as of last year.