Private equity firm buys College of Law
A private equity firm has bought a UK college with its own degree-awarding powers - in a groundbreaking deal for the UK's higher education sector.
The College of Law has been bought by Montagu Private Equity for an amount approaching £200m.
The college, set up as a charity, provides law courses in London and in other regional centres in England.
Nigel Savage, the college's chief executive, welcomed the takeover by this "well-resourced partner".
The UCU lecturers' union called on the government to "act urgently to protect" the higher education sector from such private equity buy-outs.
There had been earlier speculation that an established education firm would want to buy the college - as a way of establishing a bridgehead into the higher education market.
But the winning bidder is a London-based private equity firm, Montagu, which says it has assets worth £3.9bn under management.
The College of Law is one of five private higher education institutions with the power to award its own degrees.
Under a proposed shake-up of the UK higher education sector it was expected to become easier for new entrants into the higher education sector.
But there has been uncertainty over whether such proposals would be carried forward as legislation.
This would make institutions which already have their own degree-awarding powers more valuable.
Funds from the sale will be used to set up a charitable arm - the Legal Education Foundation - which will provide scholarships and bursaries.
This will be separated from the business of selling courses through the college.
The College of Law, with its origins in the Law Society, was set up as a charitable institution in the 1960s. It has about 7,000 students.
Prof Savage described the deal as the "beginning of an exciting new era in the history of the college for all concerned".
Montagu director, Alex Dabbous, said the new owners wanted to "grow the business, enabling it to reach its full potential, and focus on delivering the highest standards of education".
The firm's investments have included telecommunications, software, airfield lighting, waste management and healthcare.
This will be the first stake in the education market.
This marks an advance of the private sector into higher education - and also highlights the perceived value of university and higher education institutions.
Sally Hunt, head of the UCU lecturers' union, warned: "It is no secret that private equity firms are circling UK higher education.
"The government needs to make clear commitments to protect our universities and public assets. It is of paramount importance that those assets and any investment are used to further education, not increase the wealth of shareholders."
Universities Minister David Willetts said the buyout by Montagu was an "excellent outcome"
"This deal will ensure there is a well-funded charity and a successful international higher education business."