New York-Bred, Private Equity-Backed School Shakes Up Brazil
(Bloomberg) -- A New York import is set to shake up the elite segment of the Sao Paulo education scene. And your city may be next.
Avenues, a private-equity backed international school headquartered in Manhattan’s Chelsea neighborhood, is opening a campus in Latin America’s financial capital in August after several years of planning, its first expansion outside New York. It’s the first of several international locations that the K-12 school plans to open.
Surging demand helped bring Avenues co-founder Alan Greenberg to Sao Paulo six years after opening the flagship New York campus in 2012. Sao Paulo’s most exclusive private and international schools have hundreds of children on waiting lists, he said.
"Five to ten years from now, we’ll be able to fill three Avenues in Sao Paulo, there’s so much demand," Greenberg said in an interview at Avenues’ temporary Sao Paulo headquarters, shortly after pitching the school to a gathering of potential parents. "The choices here are more limited than in London or New York."
It Ain’t Cheap
The timing of the Sao Paulo campus opening coincides with Brazil’s slow emergence from a crippling recession. And it’s not the only hot new school in town. Escola Concept, a Silicon Valley-inspired school owned by Grupo Sistema Educacional Brasileiro with designs on going public, opened this year in the mansion-filled Jardim Paulista neighborhood.
Avenues, whose backers include GSV Capital, Liberty Partners and LLR Partners, aims to be a single school with many campuses around the world, from Hong Kong to Mexico City. It expects to open in Sao Paulo with 700 students in pre-kindergarten through 10th grade in a brand-new facility on the edge of the often polluted Pinheiros river.
Those things don’t come cheap. While the two locations are considered two facilities of the same school, tuition in Sao Paulo is 124,300 reais ($36,625) a year versus $54,000 in New York. That compares to Graded, The American School of Sao Paulo, which charges a one-time fee of approximately 45,000 reais and monthly tuition of 9,218 reais for high schoolers. Horace Mann School, among the top private schools in New York, charges $48,600 for 9th through 12th graders.
Ivan Amaral of private equity firm Principia Capital Partners agrees that Sao Paulo needs more world-class educational offerings.
"This is playing catch-up with global cities that already offer better options," Amaral said in an interview.
The entry of Avenues and Escola Concept has older, more established institutions investing in improved facilities and other upgrades to hold onto their students, and Principia’s interested in backing them.
"The idea is to improve infrastructure and technology, and get the schools to invest in a longer school day and after-school activities," Amaral said.
Kroton Educacional SA rose as much as 8.2 percent after announcing Monday morning it agreed to buy Somos Educacao SA, which owns seven basic education schools, for 4.6 billion reais. The news comes less than two weeks after the college giant agreed to acquire the Leonardo da Vinci school in Espirito Santo, its first K-12 acquisition.
After Sao Paulo is up and running, Avenues has its eyes on China for its next campus, likely in two years.
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