What is the Social Challenge?

The societal challenge in South Africa is the scarcity of higher education spaces relative to qualified applicants. This creates a crisis as a high percentage of young individuals exit the education system without pursuing further studies. Consequently, the country faces issues like high unemployment rates and has a large number of youths classified as NEETs (not in employment, education, or training). To address this challenge, policymakers and educational institutions must collaborate to expand access to quality tertiary education and provide more opportunities for qualified students. By doing so, South Africa can improve employment prospects and foster a more inclusive society.

Our Response:

With the Fund’s support, the acquisition of Centurion Academy has significantly expanded NewBridge Group's capacity to provide education to more students. Additionally, Summit, as the investment manager, will support corporate finance and strategic advisory activities. The Fund's shareholding and presence on the NewBridge Group's board align with BBBEE transformation objectives. Summit will also assist in implementing risk management frameworks, developing an Environmental & Social Management System (ESMS), and implementing student management and CRM systems.

Who Are the Stakeholders?

The NewBridge Group aims to assist the 700,000 NEET youths aged 15-24 years by providing meaningful blended post-school education and training (PSET) opportunities. The primary stakeholders are the youths, while secondary stakeholders include the country and local communities who benefit from a productive workforce.

What is the Scale of the Impact?

The Fund's primary objective in the Education sector is to establish a trusted brand known for delivering quality accredited tertiary education and learnerships and training. Additionally, the goal is to enhance accessibility to tertiary education by increasing enrolments. Alongside achieving target financial returns, the Fund aims to provide quality education to a minimum of 15,000 individuals during its term.

The immediate focus is on optimizing the capacity of existing campuses, which can accommodate up to 2,500 students. Simultaneously, the NewBridge Group plans to expand the number of campuses from the current 6 to approximately 13, thereby creating more job opportunities and increasing learner capacity.

NewBridge Group has successfully secured ~R8 million in student bursaries from sponsoring corporates. These bursaries will be allocated to qualifying previously disadvantaged students, ensuring that they have access to financial support for their education.

Job Creation:

The establishment of additional campuses will generate approximately 390 new jobs, comprising 169 permanent positions and 221 contract positions. These contract positions are teaching roles, and contract employees will have the flexibility to lecture at other universities as well.

Community Upliftment:

During the Fund term, the objective is to achieve a steady increase in the annual number of admitted students, targeting an estimated 7,500 to 9,000 students between 2022 and 2028. By providing access to education and training opportunities, particularly through the offering of one-year and three-year courses, NewBridge Group is empowering young individuals to become active participants in the workforce.

Transformation, Diversity & Inclusion:

Through the Fund's investment, black ownership in the NewBridge Group rises from 0% to 55%, with black women's ownership increasing to 16%. NewBridge Group's management, in collaboration with Summit, is finalizing a transformation plan that includes specific targets such as a 50% ratio of BBBEE to non-Black new hires and a 60% female to 40% male ratio. Gender splits will be maintained at 56% female and 44% male. These initiatives aim to enhance diversity and inclusion within the organisation.

What if NewBridge College Did Not Exist?

The NewBridge Group is dedicated to providing quality and affordable education through its campus learning and upcoming online learning platforms. This commitment addresses the pressing issue of the scarcity of higher learning facilities and courses, which has adverse effects on the youth and the economy. The presence of institutions like the NewBridge Group is crucial in mitigating and improving this challenging situation.

What is the Risk?

The risks identified for the NewBridge Group include the absence of a comprehensive risk register and risk management framework, which is targeted for completion in Q3 2023. Other priorities include finalizing board and committee frameworks, hiring an ESG-focused individual, implementing cybercrime prevention policies, and finalizing information protection policies. Additionally, the implementation of resource efficiency measures, such as a three-day campus week and exploring alternate energy solutions, aims to address energy challenges and reduce greenhouse gas emissions. Measures have also been taken to enhance community health, safety, and security, including the installation of separate firewalls and adherence to occupational health and safety procedures.