Author: AlanPreece

Fade Away or Speculate

With businesses being sold, some chances of consolidation and some new information being available it seems a good moment to have a look at the fortunes of the major pathway businesses.  There is also the chance to speculate on how the future might look for some of them.  It’s all by way of a contribution to the thinking in the higher education sector and the author, as always, is happy to have authoritative responses that bring clarity, correction or corroboration. 

Shorelight

As reported in July 2022, Shorelight seems to be all in on developing an aggregator-style approach to direct recruitment partnerships.  It looks as if another flagship Pathway partnership has been lost with the University of Mississippi no longer featuring on the website at all.  The partnership was launched in September 2018 with Shorelight CEO, Tom Dretler, saying “Our programs would not be thriving as they are today without our partnerships with top-tier universities like Ole Miss that provide international students with access to high-demand degree programs.”  Maybe they’ll miss Ole Miss…

It’s difficult to say with certainty how well the direct recruitment business is doing or how financially rewarding it is.  An investment-oriented perspective comes from Huron Consulting Group who took a $27.9m stake in Shorelight during 2014 and 2015, which rose to $40.9m in 2020.  The original maturity date for the early investment was 2020 which was pushed out to 2024 when the additional investment was made. 

The Huron Consulting Group Inc. annual report for the year ending December 2022 shows that the maturity date has been pushed out to 2027 which suggest they are not expecting it to be repaid any time soon.  Other news from the filing was that the “fair value” of the holding was reduced year on year from $65.9m to $57.6m.  Tracking the percentage difference between the investment holding and the “fair value” suggests that after a peak in 2018 it’s been pretty much downhill ever since.

INTO University Partnerships

It’s difficult to know where to start with INTO but there is a sense of something in the air.  The public spat with the University of South Florida1 appears to have seen the legal arguments reopened2 with a continuing pursuit of individuals from the University for Breach of Fiduciary Duty3.  More recently the company’s first ever partner, the University of East Anglia in the UK, has seen its vice-chancellor resign and a suggestion that the joint venture won’t be returning profits for distribution until 2029/30.

A single outpost in Australia seems bound to come under pressure from the super-dominance of Navitas after their purchase of Study Group’s interests in Australia and New Zealand.  Study Group’s retrenchment and the potential for a strong competitor emerging if Oxford International Education Group succeeds in a bid for Cambridge Education Group could bring increased pressure on the pathway business in the UK.  There seems to have been no progress in new business development in the US and the partners there show little sign of a post-pandemic boom.

All this comes after an upweighting of the INTO Group Board with two senior directors in Annalisa Gigante and Tamsin Todd and the addition of Nick Adlam whose LinkedIn profile indicates he also works for Andrew Colin’s Espalier Ventures Limited4.  It is not uncommon for companies to strengthen their board before looking for new investment or possibly to secure a public listing of some sort.  Perhaps the Alternative Investment Market, once described as a ‘casino’ by Roel Campos of the US Securities and Exchange Commission is a route.  

It’s pure speculation (no pun intended) but an IPO for a part share of the business could offer Leeds Equity an exit while bringing some new cash for INTO to revitalise its business.  It’s the sort of audacious move that might appeal to the company’s lead shareholder.  AIM also seems to offer the flexibility on governance and regulation as well as the access to capital that might be appealing.5         

Study Group

Amid all the talk of it being “consistent with the strategies of both companies” it was difficult not to believe that Study Group’s sale of its Australia and New Zealand operations to Navitas was that of a company in needs of cash.  We know from Study Group’s 2021 annual report that covenants on its term loan debt were set aside until 2024 and that Ardian provided a capital injection of £40m in February 2022 on top of an investment of £17m in February 2021.  Adjusted EBITDA of £14.4m was down from £25m year on year.

All that is on top of the loss of Lancaster University which comes just a few years after Leicester University jumped ship to Navitas back in 2019 and suggestions that CEG has been more successful when competing for high ranked university partners in recent years.  The signing of Teesside University in the UK in 2021 was a bright spot but the logic of picking up a direct recruitment partnership with Florida Atlantic University, which split with Navitas in 2019, seems strange given recent history in the US. The business in the Netherlands has also been closed as a result of “changes in international student recruitment regulations”.

Insendi is sometimes touted as the brightest star in the Study Group playbook and of 54 university partners on the company website at least 21 are with the online platform only.  There is no doubt that it has had some decent names with elements of Imperial College and Johns Hopkins on the roster.  But given the ongoing pressures on OPMs and reports of a “rocky time” in the sector the future seems less than certain.

CEG, QA Higher Education and Oxford International Education Group

The “for sale” sign has gone up around CEG and there were suggestions in 2022 that QA Higher Education might also be up for grabs.  It has been flagged that Oxford International Education Group may well be in the hunt and winning CEG would take them to 13 pathways in the UK but a further prize would be the ten online CEG partners. While CEG has been successful in securing new university partners in recent years there have been suggestions that the commercial terms require very strong recruitment to be sustainable, so any deterioration in UK visa conditions could make life difficult.6 

News around QA Higher Education has been more muted and the recent appointment of a new COO, Kit Tse, who held a similar role at Oxford International Education Group, might suggest that they are in it for the longer haul.  The real question, if so, might be whether there is scope for significant future growth in the UK when universities without commercial pathway partners are finding recruitment fairly straightforward.

Kaplan

The good ship Kaplan seems to sail steadily on its way while others roll, pitch and yaw in choppy seas.  The Annual Report and Financial Statements suggest a relatively untroubled (or at least well managed) COVID period with revenue rising from £116.5 in 2019 to £133m in 2021 and profit going from £7.2m to £12m.  It’s a solid portfolio with something for everyone but there may be a moment in a later blog to have a look at each of the underlying pathways to see who may not be doing so well.

Summary

The scope for consolidation in the sector seems to be clear but the froth and excitement created by record-breaking enrollments in the UK and a bounce-back in the US could also tempt unwary investors to enter the market.  They may want to cast their minds back to the period in the early 2010s when over a billion dollars was invested in pathway on the back of a belief that the US was the new El Dorado.  Parthenon Group’s statement that, “We anticipate that growth will be constrained only by the pace at which private providers can develop the market” did not age well.

Global competition continues to increase, source markets continue to evolve and the uncertainties of Government policy continue to be an existential threat to any expansion ambitions.  Anyone who has brought two businesses together will also tell you that for every synergy there is a clash of ego and culture while for every opportunity there is a bedevilling and unforeseen challenge.  It all makes for a moment when operators probably have to choose to step back and fade away or show the appetite for risk and speculation.     

NOTES

  1. This has been extensively covered in previous blogs (starting August 2022) with the lead case being closed in January 2023.  Court Filings indicate it was reopened on 16 February 2023.  A future blog will look at the circumstances and any continuing action.
  2. SRS Reopen Event shown at the Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County Florida Complex Business Litigation Division. 
  3. Filing # 167652717 E-Filed 02/27/2023 07:53:06 PM in the Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County Florida Complex Business Litigation Division
  4. Espalier Ventures is 100% owned by Andrew Colin with INTO University Partnerships Limited making up 99% of its turnover.
  5. It is only fair to say that in 2015 Marcus Stuttard, head of AIM, reflected that, “If AIM was just a casino it wouldn’t have lasted 20 years.”  The obvious riposte might have been that the oldest licensed casino in Nevada turned 90 in 2021 because there will always be gamblers!
  6. This is a summary of discussions with third-parties and there is no direct evidence that terms are more onerous than some others in the sector. The general point is that universities are more experienced in understanding pathways and are likely to be more demanding given the number of pathway options available.

“We Rely On Own Goals”

Reports suggest that the University of East Anglia (UEA) is in “financial turmoil” and facing a £30m deficit this year rising to £45m within three years.  Clive Lewis, MP, for the constituency in which UEA sits has spoken of the university being in a “death spiral”, is seeking a meeting with the Education Minister and calling for a possible public enquiry.  A deeper dive offers some thoughts for other institutions on leadership, governance, cutting losses and getting the value proposition right. 

Matching Reward and Responsibility

Vice-Chancellor David Richardson, who tendered his resignation last week and left with immediate effect became a university Pro-Vice Chancellor in 2011 and Vice-Chancellor in 2014.  He had been at the university for over 30 years and taught in the famous Lasdun Teaching Wall for much of his career.  It would be difficult to suggest that he is not an insider and has no culpability for long term decision making about the institution and its future.

For that experience the rewards were substantial.  Richardson’s emoluments have increased by around £90,000 since he took office in 2014.  In 2019/20 when the “…mean paid basic salary for the heads of all [university] providers was £219,000”, his salary was 23% higher at £270,000 so exceptional performance was to be expected.  Salary and benefits are also only part of the story with pension contributions rising even more quickly in percentage terms over his tenure to achieve total emoluments of £343,000. 

In addition, the University reported that from 2018 to 2021, when he might have been expected to be focusing solely on the institution’s increasingly perilous financial situation, he was earning an additional £13,000 a year as a non-executive member of the Norfolk and Norwich University Hospital NHS Foundation Trust board.

Another point about the upward trend in his salary is its comparison, as a multiple, to that earnt by others in the University.  The multiple grew every year with the exception of 2021 when the Executive Team “volunteered a 10% reduction in salary for the first six months of 2020-21 with the vice-chancellor volunteering 15%.” The figures suggest the vice-chancellor more than made up for it the year after and just before resigning.

NB: Measure is the multiple of the vice-chancellor’s basic salary on the median pay of staff (excluding student workers who could be paid through a third party) where the median pay is calculated on a full-time equivalent basis for the salaries paid by the provider to its staff.

Most would say that Richardson was well paid and had a long-term understanding of the university, its potential and its challenges.  As far as I can see the resignation announcement and personal statement on the university website contains no sign of accepting responsibility for its financial collapse or the impact on those who had been his colleagues for, in some cases, decades.  When Chair of UEA Council, Dr Sally Howes stated, “I’m sure I speak for the whole community when we thank David for his commitment and service to UEA for these many years” it is abundantly clear that she does not capture all views on his tenure as VC.  

Seeking Good Council (sic)

Richardson was supported on the University’s Executive Team by six pro-vice chancellors, a provost and deputy vice-chancellor, and four senior administrators.  It is not entirely clear how this overlaps with the key management personnel who the Financial Statements describe as “..those ten individuals having authority and responsibility for planning, directing and controlling the activities of the University.”  What is clear is that in 2017/18 there were nine of them with £1,296m compensation and by 2021/22 there were 10 with compensation of £1,813m.

Other key figures in terms of oversight were Dr Sally Howes, the University’s incoming Chair in August 2021 who became the first Chair of the University’s Council, for at least ten years and possibly ever, to receive remuneration (recorded as £30,000 in the 2021/22 Financial Statement).  On making the appointment the University noted that she brought “… a wealth of experience in strategic roles in the UK space industry.”  Mark Williams had been Treasurer on Council since August 2016 and was previously a partner at Deloitte, one of the UK’s big four professional services companies, so was far from a newcomer.

There were, arguably, quite a few people who had taken positions of responsibility to lead the University.  However, anyone familiar with higher education will recognize the issues raised in a 2020 report “Universities Governance: A Risk of Imminent Collapse” and the urgent need for reform.  It’s summary notes points like, “Council members and VCs rate themselves highly, but in reality are cumbersome and fail to devote adequate time to critical governance issues” and “The office of Vice-Chancellor (VC) has gained tremendous power, while its counterbalance – the university council – is poorly-structured and outdated in approach.”  

Pathed with Good Intentions

The signs that UEA might be sleepwalking over a cliff seem apparent on reviewing the Financial Statements.  In 2018 and 2019 David Richardson and Mark Williams signed off the Business Review including the sentence, “The University remains confident that it has in place adequate funding to support the operational and development plans, and to provide a reserve for managing financial risks, over the next three years.” 

For 2020, 2021 and 2022 the wording changed to, “The University remains confident that it has in place adequate funding to support the operational and development plans, and to provide a reserve for managing financial risks, over the next five years.” (my emphasis).  It is difficult to understand what drove this change in the timescale of their confidence at a point when the world was going through, then recovering from a pandemic where everyone’s future was in turmoil.  Their confidence proved to be ill-placed.

Some of the Council minutes are equally concerning in retrospect.  In November 2021 they report that the “Chair indicated that there is no end-to-end responsibility to management of risk.  It was Council’s responsibility to set the risk management appetite.”  The following sentence, “VC indicated that risks will be managed more closely in future” but a later revelation that the internal audit had found areas for major improvements for the second year suggests a lack of attention to critical detail.

At the next meeting in January 2022 a note from the Audit Committee comments, “concerns about red risks was noted and concerns were expressed about risk management and the extent to which it is embedded in the organization.”  Perhaps prophetically given current circumstances Council “..suggested that staff morale might be considered to be added to the risk register.”  In just three months the approved budget deficit set at £20.8m for 2021/22 had increased to £25m.

There is a sense in going through the set of  2021/22 Council minutes that the risk of failure and a diminishing hold on core management disciplines was being flagged but repressed.  There does not appear to be much sense of mounting urgency over critical issues and while the danger of over-optimistic forecasting is flagged the abiding confidence in having “adequate funding” overwhelms it.  Whether this was just happy talk, an attempt to obscure reality or simply a failure to comprehend is unclear.  

Basics In a Bind

Meanwhile, the basics of running a decent university seem to have been forgotten.  At a point in time when many universities have adjusted their recruitment strategies to secure significant financial advantage UEA seems to have been stranded as a high-priced, non-Russell Group outpost of misguided thinking.  International student income in 2021/22 was lower than in 2016.

Just by way of comparison it is worth considering, say, the University of Leicester’s performance.  In 2016 the income from international students was £52m but in 2022 it had reached £71.8m.  Leicester is of comparable quality optically at 29th in the Complete University Guide compared to UEA’s 27th , it is non-Russell Group and its fees for international PGT are generally higher than UEA.  There seems to be a failure of international recruitment strategy at UEA that management should have addressed.       

Meanwhile the University performance on Research Grants and Contracts has been flat for five years and while the Home Full-Time Student increase looks strong the university notes in its 2021/22 financial statement that it “…fell approximately 8% short (2021:17% short) of entry targets..”.  Taking these alongside the failure to tackle international student recruitment and the continuing decline in the real value of Home student fee tuition suggests an inability to control key revenue lines effectively. 

NB: Research Grants and Contracts are University only to provide a like for like comparison over the period.

Along the way, the joint venture with INTO University Partnerships fell into serious difficulties with losses accelerating and the path to profitability seeming to extend from three years in the 2019/20 Statement to five years from 2021/22.  In 2019/20 the words used were, “..there will be no distribution in respect of 2019/20 nor for the next three years (my emphasis) whilst the joint venture recovers and builds up surpluses for distribution” which implied a distribution by 2023/24 at the latest.  In 2021/22 the words had changed to say, “…there will be no distribution in respect of 2021/22 nor for the next five years (my emphasis) while the joint venture recovers and builds up surpluses for distribution” which suggest no distribution until 2029/30.  The slippage in forecasting recovery is baffling when for the privilege of maintaining the relationship UEA has also become co-guarantor for half of a loan of up to £7m to the joint venture. 

Challenging Times or Chumps in Charge?

Nobody should underestimate the difficulties caused by the pandemic but it is clear that many institutions responded quickly and effectively to changed circumstances.  It should not be a surprise to universities that international student dynamics were always likely to favour Russell Group universities for brand conscious candidates while those from many growth markets are more interested in lower cost tuition and accommodation.  You can’t buck the market and shouldn’t consider your aspirations and ambitions as any guarantee against the cold reality of competitive markets.

Suggestions that problems and costs associated with the Lasdun Teaching Wall have exacerbated the situation are far from new.  However, the 2006 Conservation Development Strategy for the University of East Anglia noted the issues and that solutions would “…require the expenditure of resources by UEA.”  Whether university leadership failed to respond sufficiently at the time or later is a matter that the possible “public enquiry” espoused by local MP, Clive Lewis could consider.

Either way, the recriminations will go on.  In a relatively small community like Norwich the prospect of compulsory redundancies after a £13.5m loss in 2021/22 had already sent shock waves through the city.  The rapid escalation of the scale of loss from £37m in three years to £45m undoubtedly requires action that will be far more draconian than if the problems had been isolated and acted upon earlier.  It is troubling that the lack of confidence in University leadership extends to the interim Vice-Chancellor who has been part of recent decision making.

A UEA Council Minute of November 2021 suggests the VC should bring forward a summary to each meeting of “what was keeping the VC awake at night”.  With the decision to resign we might never know the answer to that question but the difficult times ahead will cause many academics and administrators to rethink their own futures.  It may also be interesting to see if the Education Minister is kept awake at night by the HEPI article in September 2021 suggesting, “Why the Government should never bail out a university” and the past rhetoric of the Office for Students.

NOTES

  1. The headlines is from a quote by ex-Norwich City manager Daniel Farke responding to claims of complacency in October 2020. They were promoted that year. Then relegated the next season with Farke leaving in November 2021.
  2. Financial information about the University, Vice-Chancellor emoluments and other compensation are taken from the University Financial Statements
  3. Information about INTO UEA is taken from the annual returns to Companies House.

Image by Arek Socha from Pixabay 

Amendments

On 2 March the reference in the third paragraph from the end to the constituency MP was amended to Clive Lewis (from Charles Lewis).

UK International Enrolments Unchained

The latest HESA figures (released 31 January 2023) give a further instalment and insight on the extraordinary recent changes in global student mobility and the impact on UK universities.  As predicted in early 2020 the growth of India as a market, largely encouraged by a more welcoming post-study work situation, has substantially altered the landscape.  This blog takes a look at other significant changes, a snapshot of key countries and who the winners and losers are in the enrollment stakes. The focus is on full-time students1 and there are a few words of caution at the end.

Overview    

After a few relatively flat years the period from 2018/19 to 2021/22 has seen a CAGR of 17.39% in enrolment of full-time, non-EU international students. Part-time, non-EU international students have grown by a CAGR of 10.44% from a much lower base. While part-time changes are interesting the focus here remains on full-time numbers.

The first and most obvious thing about the mix of students is that Postgraduate Taught numbers have accelerated rapidly and particularly so from 2020/21 to 2021/22.  The total number of postgraduates is up 117% over the period with the total number of undergraduates up 26%.  A strong performance but always with the risk that postgraduates usually only come for a single year and as global competition increases may look elsewhere.

It is no surprise to anyone to see that India has been the dominant driver of the change.  But both “Other Asia” and “Nigeria” enrolments have increased by more than China since 2018/19. 

  NB: This chart has not been disaggregated for Full and Part-time.  Increases in part-time students are relatively modest over the period.

“Other Asia” is worth disaggregating and the chart below shows the change in enrolments over the past four years in the countries with the highest number of students in the UK.  Most noticeable in volume terms is the year-on-year growth from Bangladesh and Pakistan.  68% of full-time students from Bangladesh and 67% from Pakistan are postgraduate taught compared to 80% of those from both India and Nigeria. By contrast 52.6% of full-time Chinese students and just 17% of Hong Kong students are postgraduate taught. 

 Country By Country Review

The countries to follow for volume growth are clearly India, Nigeria, Pakistan and Bangladesh and at each individual country level the march of the non-Russell Group universities goes on. This section focuses on the year-on-year growth from selected countries.

India

Coventry added 2,900 full time enrolments from India year-on-year and now stands only behind the University of Hertfordshire in terms of the largest Indian contingent in the UK.   Nearly half the year-on-year total increase from India for the UK came in the ten universities with the most significant change in enrolments.

There are also some interesting shifts within universities in terms of their balance of students.   As shown in the table below, the universities of Leicester and Brunel are in the top ten for increases in students from India (but are among the biggest losers from China).  Roehampton University’s year on year growth of 332.9% is quite startling.   The Russell Group universities have not been totally out of the picture with Glasgow, Manchester and Warwick all managing to add 1,000 or more Indian students year on year.

There may also be a word of warning due for institutions growing their numbers from India and relying on the increased volume being sustainable.  Five universities lost over 20% of their Indian enrolments year-on-year in 2021/22.  The University of Wolverhampton may offer a salutary tale with a rollercoaster ride from 85 in 2018/19 to 1360 in 2020/21 but a decline in 2021/22 to below its level of 840 in 2019/20. Any failure to offset that from other countries could be a serious financial hit.

Nigeria

The table for Nigeria shows the top six gainers to include the University of Hull’s extraordinary increase of 1207%, while of the 915 there are 870 postgraduate taught. The University of Hertfordshire has the largest number of Nigerian student enrolments in the UK and of the total 1,915 (83.8%) are postgraduate taught.  The best Russell Group performance was the University of Glasgow which increased by 60 students to 170.

Pakistan

The growth in enrolments from Pakistan is generally more widely spread, although non-Russell Group universities dominated recruitment from the market.  Queen Mary University of London was the best performing Russell Group university with an increase of 30 year-on-year.  The University of Hertfordshire performance puts it in the top five in terms of volume growth for each of Nigeria, Pakistan and Bangladesh and in the top ten for India.  If there were an overall league table they would probably lead on points.

Bangladesh

The University of Hertfordshire also features strongly in Bangladesh where it’s year on year growth put it in the top five.  Further down the rankings there are some significant percentage increases but from lower bases with De Montfort, for example, increasing from 50 to 390 and Cardiff Metropolitan going from 30 to 325.  Queen Mary University of London is the best placed Russell Group university with, um, 80.

China

The exception to the general rule continues to be China where the two Russell Group universities in Scotland are showing substantial growth.  University of the Arts is possibly the surprise packet in the top five for growth and other notable growth in a field dominated by the Russell Group institutions was shown by Goldsmiths College (470) and Kingston University (515).

As noted in previous blogs, however, the strong recruitment performance in China is not universal for the Russell Group.  The universities with the greatest year on year reduction in Chinese students are Liverpool and Newcastle with Queen’s University Belfast and Cardiff doing well below par for the sector.  In the context of their performance in India (as discussed above) it would be interesting to know if the universities of Leicester and Brunel have changed strategy because of opportunity or an inability to compete with brand sensitive students from China.

Summary and Thoughts

Taken in conjunction with previously reported trends in enrolment from 2018/19 to 2021/22 it is clear that the changes in growth markets have presented significant enrolment and financial opportunities for universities who may have struggled to recruit heavily in China.  There seems little doubt that while there is a benevolent, post-study work visa regime, universities in the UK will be able to continue making progress in India, Bangladesh, Pakistan and Nigeria.  Whether Russell Group institutions sharpen up their strategies or choose to wait (possibly hope) for a return of Chinese students remains to be seen.

What is also in the mix is whether the enrolment trend is driven solely by successful institutions offering some mix of low cost (both tuition and accommodation), sympathetic local culture, lower entry criteria and dynamic recruitment tactics.  The disparity in volume growth between Russell Group institutions and many well ranked universities such as Surrey, Loughborough, Bath and Lancaster seems extreme.  Perhaps some institutions need to look harder at their international office strategies. 

It is noticeable that of the top 40 universities in the 2023 Complete University Guide only the University of Leicester (29th) makes an impression among the best recruiters from India.  This may be another sign that students are largely ignoring rankings and pursuing a degree in a country where they will have the option to work during and after study.  These are features that are more about Government policy than university excellence.

There are, of course, other implications for the scale of growth being seen.  It is noticeable that the University of Bradford has closed applications to some courses for 2023 and that Oxford Brookes and the University of Salford have also made adjustments to constrain the number of applications being received from certain countries.  It is almost certain that other universities will be doing the same.

Beyond that are the financial implications. The University of Hertfordshire is in the top five gainers for the four biggest growth markets and this is reflected in the percentage of income arising from international tuition fees. From just 11.6% of total income in 2018/19 the fees are now worth 31.9% of total income.

One must also consider how those with sudden increases, like the University of Hull with an increase of 1207% in its students from Nigeria, will manage the student experience.  In 2020/21 Nigerian students made up 3.8% of the university’s full time international population but in 2021/22 they will be 30.2% of the group.  These are substantial shifts that require careful attention to maintain reputation and quality of academic performance.

Finally, there is the likelihood that growth will have continued into 2022 enrolments.  With the majority of students now coming as postgraduates for one year and an increasing propensity to intend to stay after studying, the summer of 2023 is likely to see greater competition for graduate jobs than ever before.  Whether the UK is ready to manage that opportunity successfully in the middle of a recession and with a Conservative Government planning its strategy for an election just 18 months away remains to be seen.

NOTES

  1. The focus is on full-time students to avoid any distortion from individual universities doing significantly better with part-time students.

Image by Jan Alexander from Pixabay 

New Year, New INTO?

INTO University Partnerships’ (INTO) recently released Report and accounts made up to 31 July 2022 point to the impact of the pandemic, global student mobility changes and the financial health of pathways.  There are also three new board appointments in the past three months to consider in a higher education recruitment environment where talk of consolidation is gathering pace.  The court case with the University of South Florida is noted as a contingent liability.

And The Tide’s Gonna Turn1

Starting with the Board appointments, there is reason to celebrate as INTO moves from being a board of six men in the previous year’s Report to a smorgasbord (pun intended) of seven men and three women in January 2023.  That makes the group board bigger than the INTO Executive team of nine – four men and five women.  At the date and time of writing the new Board Directors haven’t appeared on the corporate website which is a bit of a shame as two were appointed at the start of November.

It’s not clear whether the new appointees signal a reshaping of strategic direction for INTO.  Annalisa Gigante started at Bain&Co and one profile highlights that “..her key focus areas are sustainability, digital technologies including AI and IoT, new business models, and building high performing teams.”  Nicholas Adlam was at Bain&Co for five years (not overlapping with Annalisa) and held a number of management roles before joining INTO as “growth and transformation” consultant in 2020.  I am guessing that Tamsin Todd is the same individual as the CEO of Find My Past but INTO is not listed on her LinkedIn profile and I can find no supporting announcement of the appointment.

Another Year Older and Deeper In Debt2

Turnover for the year to 31 July 2022 is shown as an adjusted figure improving by £15m to £138m but its worth remembering that the adjustment removes discontinued operations.  For reference the adjusted turnover was shown as £194m in the Report to 31 July 2019.  Back in the Report for 2017 the Group turnover was shown as £276.5m which suggests that the closure of partnerships and the pandemic may have halved its size since then3.

To try and put some sense of the changes since then the 2017 Report noted the “Number of INTO partnerships” as 24.  In the most recent report there appear to be 50% holdings in 11 operational ventures plus 51% in INTO Newcastle and 100% of INTO SLU.  The relationship with Hofstra University is not noted in any form in the current Report.

What has continued to mount is the debt owed by joint ventures to INTO University Partnerships.  The year-on-year increase in debt is over £8m with the majority of the change reflecting the longer-term trend of partnerships in the US becoming increasingly indebted.  This reflects the challenges facing US pathways in recent years. 

How Long Can This Go On?4

New faces and the end of the pandemic could lead to a reset and INTO certainly seems in need of it.  The US operation saw the return of David Stremba as SVP of Partnership Development, North America and the UK leadership team was re-jigged last year with a seeming change in focus across Russell Group and non-Russell Group universities in the portfolio.  Perhaps a combination of direct recruitment contracts, in person and in country activity through initiatives like the University Access Centres, and the return of student demand from China will see a change in fortunes.   

There are, however, headwinds.  While the UK has had a boom in international recruitment over the past three years partners like Newcastle University and the University of East Anglia have underperformed the sector.  In the US it seems that Shorelight has been making much more rapid progress on direct recruitment and has retained more pathway partners than INTO.  The public and apparently acrimonious split with the University of South Florida may be unhelpful to INTO in brokering new deals.

Whether there is some merit or enough financial firepower for a merger, sale or takeover with another operator may be one question to answer.  Some form of alliance with a careers/employability focused partner or building/buying a credible online delivery operation might also add some interest to what looks a dated offering.  All things for the new board members to ponder.             

NOTES

There’s a working theme to the sub-titles.

  1. A lyric of hope from “9 to 5” by the wonderful Dolly Parton. The song—and film— were released in 1980 and owe their titles to 9to5, National Association of Working Women,  an organization founded in 1973 with a mission supporting women working for equal pay, power and participation.
  2. Slightly adjusted line (the lyric says “day” not “year”) from 16 Tons written by Merle Travis.  It is based on life in the mines of Muhlenberg County, Kentucky.  Several lines in the lyrics are direct quotes from his brother and father who worked in the mines.
  3. The adjustment of figures is difficult to follow.  Links are given to the source data for those who wish to investigate further and I am always happy to receive and publish an authoritative correction.
  4. From Working In the Coal Mine which was written by Allen Toussaint and a hit for Lee Dorsey in 1966.  Neither had ever been down a coal mine

Image by Arek Socha from Pixabay 

PATHWAYS GREAT CONSOLIDATION?

Last week’s news that Oxford International Education Group (OIEG) is in the hunt for buying Cambridge Education Group (CEG) could be the first step in consolidation for the pathway sector.  It comes after a few torrid years where aspirations for pathway growth in the US foundered and the pandemic wreaked havoc with global student mobility.  Murmurs that QA Higher Education may also be on the block and long-standing speculation that Andrew Colin and/or Leeds Equity might seek options on their investment in INTO make for a potential realignment of interests.

On the face of it a trade sale for CEG has the advantage of reducing recruiter competition in a market where new entrants have been one factor in the growing cost of student acquisition.  It would also make for a group that had some genuine clout with fifteen UK pathway partners1 including a Russell Group name in the University of Southampton.  Both have minor interests in the US and CEG bring European partners and a burgeoning digital business with ten partners listed.

In the UK2 this would make it larger than Navitas (11), Kaplan (11) and INTO (6) and the same size as Study Group (who lost Coventry London in 2022 and where rumours suggest another possible defection in the north of England).  It’s a point where you could see one of those players having a look at QA Higher Education who have seven university partners including four where they offer a pathway but six where they deliver an undergraduate degree programme in partnership with a university.  The restructuring could even extend into consolidation of pathway operators with the aggregator and OPM markets.   

From Strength or Weakness?  

A recent comment on mergers and acquisitions suggested that “you can’t keep a good capitalist down and eventually greed will overcome fear.”  Many investors have cash in hand after a year with little action and there are suggestions CEG is available for between £150m and £200m.  The financial returns of the various elements of CEG and OIEG are not easy to divine from published information but one can either read or deduce a number of things:

Cambridge Education Group

The financials below come from the accounts of Camelot Topco, ultimate parent company of CEG3, for the year ended 31 August 2021.

ONCAMPUS revenue declined in 2021 to £39.6m due to the pandemic but was £54.4m in 2020.  CEG Digital revenue increased to £12.1m in 2021 from £6.2m in 2020 (one would presume partly due to pandemic related online measures).  Underlying EBITDA was £7.8m in 2020 but fell back to £3.2m in 2020 due to the pandemic.  Across the two business there were around 4,000 students enrolled.

Oxford International Education Group

The financials below come from the accounts of Sparrowhawk 2 Limited, the holding company of OIEG4, for the year ended 31 August 2022.  The comparative year on year numbers span the acquisition of the business in early 2021.

Overall turnover increased to £58.8m from £33.4m the previous year.  This includes pathways, a separate English language business, operations in north America, IELTS testing and two businesses in India.  It is possible to deduce that at least £14.5m of the £58.8m is not pathway related but the accounts state that pathway revenue had increased £11m year on year.  The numbers indicate that the business made a small operating loss on the year (£0.9m) but it is stated that this masks an “underlying profit of £2,907k”.  The business is forecast to “generate positive EBITDA” during the financial year to August 2023.  

Without having CEG’s accounts for 2022 it is not possible to know what a comparative performance to August 2022 was but one would anticipate a rebound in pathway business aided by the addition of new partners.  The business is also able to trumpet the addition of Loughborough University, who have been talking with potential pathway operators since at least 2007, as a partner in December 2022.  All in all, it looks as if OIEG would be taking on a larger business with some substantial and complementary assets.   

Caveat Emptor        

CEG is able to tell a strong story on digital developments and a growing portfolio of well ranked partners which might make it a very attractive proposition.  OIEG is an aspirational business which can point to partners that have done very well out of the growth in UK student recruitment with the University of Greenwich being one of the most significant beneficiaries of the growth in the Indian market.  So, what could possibly go wrong…

Anyone looking at the UK government’s turbulent approach to international student recruitment would point to the continuing possibility of changes to visa policy as a Conservative Government prepares the ground for an election in no more than 24 months.  Significant limitations on student family members (other than with PhD students) and constraints on post study work are two of the main ghosts at the feast.  More severe limitations on lower-ranked universities and “poor quality courses” would be particularly damaging to both CEG and OIEG portfolios.

Alongside that is the sense that CEG might see a window of opportunity that means a race to the exit is the most sensible option in a market where several factors could compromise future performance.  Examples include the evident resurgence of Australia as a competitor after several years of weakness, as well as the reality that Canada remains strong and the US seems to be concentrating on visa turnaround times in major growth markets.  All that is before the revitalisation of China as an international student recruiter with eyes on Africa and India, which seems an inevitable consequence of its borders reopening after COVID.

Those who have been involved in mergers and acquisitions will also recognise the substantial risks involved in trying to merge business cultures, operational activities and brands.  For pathway operators, even as they become increasingly involved in direct recruitment, there is the added challenge of a sales team trying to cope with a plethora of university brands in their bag and not doing justice to any of them.  Smart universities will also have the potential for amendments to contracts if ownership changes and could choose to negotiate hard on revised targets and penalties for failure.

What seems likely is that consolidation will come sooner rather than later as some operators and investors head for the exit doors while the UK environment looks acceptable. The possibility of aggregators, online delivery and post study employment options coming into the mix are likely to make for an interesting year. Interesting times.

NOTES

  1. This count includes seven OIEG partners and the eight listed in CEG’s ONCAMPUS brand.
  2. This is likely to be contested territory but I have attempted to review those relationships which are on campus, joint ventures, and have a pathway element. Authoritative corrections are welcome.
  3. The ultimate controlling partner is Bridgepoint Euro IV Fund managed by Bridgepoint Advisers Ltd.  The interest was purchased in April 2013 for a reported £185m.  In July 2019 reports indicated that Bridgepoint had sold the CATS Colleges division of CEG to Bright Scholar for a transaction value of £150m.
  4. The ultimate controlling party is THI Holdings GmbH which acquired a majority stake in March 2021 in a deal which saw OIEG’s schools division sold to Nord Anglia Education.    

Image by Pete Linforth from Pixabay 

Reelin’ In the Years

Following yesterday’s blog it was helpful to see the HESA summary data for 2021/22 enrollments appearing.  While this does not give a detailed analysis of recruitment by source country for each institution it provides the data to demonstrate that a number of non-Russell Group universities have been outperforming their, supposedly, illustrious competitors in international student recruitment for the past two years of published figures.  The outperformance is on both a percentage growth and an absolute volume growth.

It seems a reasonable bet that this growth will have been driven by students from India and other countries where the importance of post-study work and lower costs of studying are major attractions.  Lean and well managed universities that are used to scrapping for every student and every penny but do not carry expensive infrastructure costs, top ranked (and paid) professors, or any illusions about rankings being a measure of attractiveness are probably doing very well.        

What’s Another Year1

HESA data shows that the year 2021/22 saw the universities of Greenwich, Teeside and Hertfordshire top this list of 19 institutions for percentage growth in international enrollments year on year.  The universities of Liverpool and Newcastle saw a decline in their enrollments.  Given the success of Northumbria University (situated less than a mile from Newcastle University) and Teesside University it seems misguided to suggest, as the Times Higher Education has, that geography is a significant factor in this recruitment performance.

Note:  Source HESA (non-Russell Group shown in red)

Golden Years2

Looking over a longer time span it can be seen that the difference in performance is even more stark.  Over a two year period the universities of Ulster, Teesside, Greenwich and Hertfordshire have more than doubled their enrollment of international students.  The Russell Group’s University of Southampton performance over this two year period less exciting than its year on year 2020/21 to 2021/22 growth but when HESA data at institution level becomes available it will be interesting to see whether their country recruitment strategy changed. 

Note:  Source HESA (non-Russell Group shown in red)

Percentages can, of course, be misleading and what matters most to tuition fee income is the absolute number of students paying fees – bums on seats in common parlance.  Several Russell Group universities started with significant international enrollments so might be expected to have increased their number of students more rapidly even if the percentage is lower.  However, even by this measure several non-Russell Group universities are outperforming the Russell Group institutions over the past two years.

Note:  Source HESA (non-Russell Group shown in red)

Tomorrow Never Knows3

It is commonly accepted that the often-quoted experiment, where a frog is placed in a pan of water that is slowly heated and is so insensitive to small changes in the external environment that it fails to escape before being boiled, is apocryphal.  The response of some universities to the changing environment suggests that the experiment might be taking place in real time with international student recruitment replacing the water.  Both the University of Liverpool and Newcastle University have done poorly over the past two years but both seem to be ignoring the underlying problem.

In its 2020/21 Financial Statements, the University of Liverpool accounts for its decline in international student fee tuition income by saying that, “overseas student recruitment continues to be affected by the pandemic, and although the impact is reduced in 2021/22, we have not yet seen a return in overseas demand to pre-pandemic levels.”  In and of itself the statement is true for Liverpool but clearly not so for many other universities.  Later in the Statements it is noted that, “there is a particular exposure to international relations with China due to our Joint Venture, XJTLU” which raises obvious questions about a recruitment strategy that has not embraced the growth in students from other markets.

Newcastle University’s Integrated Annual Report makes the point that “..we are heavily dependent on international students to keep the business running” but seems to be living in an alternative reality when it claims “..we have had a successful year with regard to international student recruitment.”  The University trumpets its league tables success for the year but fails to recognize that this is not what is driving the needs and expectations of students in the most rapidly growing markets.  The tired excuse that “ongoing uncertainty caused by the pandemic saw a lower than expected international undergraduate intake” suggests the university is the victim of an uncontrollable situation at a point when Northumbria University, just a stone’s throw away, has added nearly 3,000 international students in just two years.

On the same note, the University of Southampton’s Financial Statements suggest that “strong league table performance is a good indicator of future student recruitment, especially internationally,”. This is unsurprising for an institution that has formed its strategy around moving forward in the league tables but the facts showing desultory performance from well ranked institutions in the Russell Group club don’t exactly support the assertion. Recent research suggests that 72% of GenZ students think the rankings less important than finding a university that gives them the right skills for their future.

It is always good advice to separate cause from correlation and to not be the apocryphal frog. A new twist on an old phrase might be that it is time these universities smelt the coffee and woke up.  There is a new international recruitment dynamic and they need to pay attention. 

Notes:

The headline is from the Steely Dan classic, Reelin’ In The Years, released in 1972, although my argument is that some Russell Group universities are reeling in terms of response to market changes than fishing effectively. For those interested in such things, the Wikipedia article on the band appears to avoid exploring the origin of the band’s name.

  1. What’s Another Year is the Irish Eurovision song contest winner from 1980 when it was sung by Johnny Logan. Johnny Logan is the only performer to have won the Eurovision Song Contest twice, in 1980 and 1987. He also composed the winning song, Why Me?, in 1992.
  2. Golden Years is from David Bowie’s Station to Station album released in 1975.
  3. Tomorrow Never Knows is from The Beatles’ Revolver album released in 1966. The song title apparently inspired the title of the 1997 James Bond film Tomorrow Never Dies (which itself is supposed to be typo from the original idea “tomorrow never lies”. 

Sign o’ the Times

For a news outlet that claims to have a mission to be “..the definitive source of data, insight and expertise on higher education worldwide” the Times Higher Education sometimes seems woefully short on understanding of the realities of international student recruitment.  There is also an unhealthy focus on Russell Group universities which suggests more about the THE’s obsession with rankings, brands and research than any enlightened engagement with the broader sector.  A recent example is its article “Overseas student recruitment windfall for leading UK universities” (January 18, 2022).

For those outside the THE paywall, the piece concentrates on some Russell Group universities seeing international student fee income rising significantly between 2020-21 and 2021-22.  There is a suggestion that those in London and the south of England have done particularly well but that enrolments are “either flat or slightly down at some northern institutions, including…Liverpool, Newcastle and Sheffield.”  As well as perpetuating the myth that the Russell Group are either all or the only leading universities in the UK this misses a much more interesting story about the way that changing international markets are altering the financial and recruitment dynamics of the sector.

What If becomes the Hot Thing2

As far back as January 2020 my blog predicted that “..the incoming surge of Indian students might bring a new dynamic to the market” and that “the return of post-study work visas has disrupted enrolment patterns and some lower-ranked universities may have the most cause to be grateful.”  In March 2021 I presented data showing that, “..the distribution of Indian students by type of institution has proved to be significantly different to that of Chinese students” and gave an example as to why geographical location was not the driving factor.  Then in January 2022, I reinforced the findings and made the point that “price points and graduate outcomes could become far more powerful signals than whether the THE, QS and AWUR algorithms choose to favour the rich, old and elitist.”

The impact on increases in student fee income is very clear.  Year on year, percentage rises in international fees (excluding EU students) actually show that the Russell Group is underperforming many other universities.  It is equally clear that location is not the main driver of performance.

The table below shows the 2018/19 to 2020/21 change in international enrollments from China and India across 8 Russell Group universities and 8 non-Russell Group universities (including low tariff institutions).  This is shown alongside the year-on-year change in international fee income (excluding EU) from 2020-21 to 2021-22.  Several non-Russell Group institutions have seen greater comparative financial growth by increasing student enrollments from India while those in the Russell Group remain reliant on China.

Table – % Change in Year on Year International Fee income 2020/21 and Change in Volume of Chinese and Indian Enrollments from 2018/19 to 2020/21   

 % change in international (exc EU) fee income 2020-21 to 2021-22Change in number (and percentage) of Chinese students 2018/19-2020/21Change in number (and percentage) of Indian students 2018/19-2020/21
Southampton92.1745 (27.5%)50 (27.8%)
Teesside8545 (13.4%)1470 (358.5%)
Hertfordshire76.9-355 (-53.8%)3930 (397%)
Greenwich60.8-285 (-44.5%)1760 (239.5%)
Ulster55.8-85 (-47.2%)3270 (2725%)
Queen Mary47.4600 (40.8%)150 (29.4%)
Kingston44.3110 (24.2%)1635 (302.8%)
Exeter33695 (50.7%)135 (28.7%)
Northumbria29.250 (10.1%)2215 (357.3%)
Leicester26.7-590 (-36.1%)1025 (683.3%)
Central Lancashire22-315 (-44.4%)2365 (375.4%)
Warwick21730 (23.4%)80 (11.2%)
Imperial18.51115 (40.3%)35 (14.3%)
Manchester16.53000 (53.5%)85 (16.2%)
UCL164040 (64.7%)55 (13.6%)
Sheffield0.61550 (32%)545 (187.9%)
Liverpool-14.2-1300 (-23.4%)240 (200%)

Notes:

  1. Non-Russell Group institutions are in bold
  2. Financial information is taken from 2021-22 Financial Statements
  3. Student enrollment data is taken from HESA

Newcastle University is not shown because it does not appear to separate EU and other international student fee income in its financial statements.  However, the enrollment numbers comparison between it and the University of Northumbria (which is less than a mile away) demonstrates that blanket assertions about trouble up north are misguided.  Northumbria’s international enrollments have outpaced Newcastle’s significantly over the past three years with growth from India providing the bulk of the additional numbers.  It is notable that, according to HESA, Newcastle University had fewer Indian students in 2020/21 than in 2018/19.

Source: HESA (this data includes EU students.  In 2020/21 Newcastle had 1,360 and Northumbria 1,450 from the EU)

The substantial gaps in performance on recruitment of students from India does raise a number of tantalising questions about the international student strategy and/or capability of Russell Group universities.  Questions might include:

  • do they ignore academically qualified students from India;
  • do academically qualified students from India reject Russell Group institutions because of issues such as cost of tuition and accommodation;
  • are the number of academically qualified students from India so limited that Russell Group institutions struggle to grow numbers;
  • do Russell Group universities have some form of inherent bias against students from India.

Someone with a sharp eye to the sensibilities of the Home Secretary and the current political mood music might also wonder if the propensity of lower ranked, less costly and lower tariff universities to attract students from India will be seen as evidence that they are focused more on fee income than the “brightest and the best.”

Around the World in a Day3

The time lag in HESA figures means we will have to wait for some insights into whether Russell Group universities significantly changed their approach towards India in time for enrollments in 2021/22.  Without such a switch some would seem to be relying on a resurgence of students from China to maintain numbers and financial performance.  It seems likely, however, that their fee structure and overall costs might make it difficult to switch attention to price-conscious source markets.

While watching this space to see how things develop, one would hope that the THE starts to reflect that there is a world outside WC1, London, the south of England and the league tables.  For many students, issues like cost, employability, post study work and routes to immigration are at least as important in decision making as the SDGs, rankings and research capability.  With their fingers and a computer they can walk around the world in a day to assess their options and are capable of great flexibility in changing country, institution and course of study if it suits their needs.

Notes

Headline and sub-headings courtesy of the much-missed Prince.

  1. Sign o’ the Times was the title track of a studio double album released in 1987.  One of my guilty pleasures is the Starfish and Coffee track which Prince co-wrote with his then-girlfriend Susannah Melvoin.  Cynthia Rose is a real person and apparently what she really told her teacher she had in her lunch box was “starfish and pee pee”.
  2. What If is a cover version of a song written by Nichole Nordeman that appeared on her album Brave in 2005.  Prince recorded his version with 3rdEyeGirl in 2013.   Hot Thing appears on the Sign o’ the Times album and was recorded in 1986.
  3. Around the World In a Day was the title track from the seventh studio album from Prince which featured the memorable Raspberry Beret that provided the name for UK band the Lightning   Seeds through a misheard lyric.   Ian Broudie, who formed the band, thought the line “thunder drowns out what the lightning sees” was “thunder drowns out the lightning seeds.”

Image by Gerd Altmann from Pixabay 

AN ENGLISHMAN ABROAD MIGHT AS WELL BE MUTT

It’s a terrible joke.  Mutton is short for mutt ‘n’ jeff which is cockney rhyming slang for deaf.  Sitting here in the cold California morning the day after hearing that Jeff Beck has died it seems appropriate. It’s not quite “the day the music died” but his playing has been an almost daily source of pleasure in my life for fifty years.

In the early years of a mid-teenage search for identity there were a number of things that were defining.  Playing football, unrequited love and music were an entire universe and they defined who were your friends.  Belonging was important but always tempered by the drive for individuality.

Geoffrey Arnold Beck arrived in the form of Beck-Ola one day when I was 14.  I had read about him as one of the founding guitar gods of the 1960s alongside Clapton and Page.  But the supergroups of Cream and Led Zeppelin had made them accessible and popular in a way that the moody, intransigent and wilful Beck was never going to be.

The real stimulus for learning more was when he joined David Bowie on stage at the final Ziggy concert at the Hammersmith Odeon on 3 July 1973.  Beck was the guitar hero of Bowie’s guitarist Mick Ronson but the review of the concert carried a description of Ronson trying to shimmy his lurex clad self against Jeff who was having none of it.  The phrase I recall, possibly inaccurately, was that Jeff was as “camp as a butcher’s dog”.

Ronson was a very good guitarist but the notion that he had a guitar hero was news, so I took a chance and Truth was purchased.  Anyone who has ever put a needle onto vinyl to listen to a new record will know the excitement of the hiss and crackles before the music.  To have “Shapes of Things” assault your ears as a first up track was proof that this was something different.

It’s a curious album in many ways.  Second track “Let Me Love You” remains a favourite and has one of the most achingly good blues solos alongside Rod Stewart singing in his pre-celebrity pomp but on the same  record there’s a version of “Ol’ Man River” and “Greensleeves”.  Jeff was nothing if not eclectic and on the sleeve notes he makes the point that the last note of the album’s take on “You Shook Me” was his guitar being sick “and so would you be if I’d just ripped your guts out for 2minutes 33seconds”.

His playing was by turns visceral, playful, distorted, pure but always interesting and there are times when I have laughed out loud at a solo because for all the virtuosity there is humour and audacity.  They are like a well told story where the punch line can be comedic, dark or just a statement but is always a surprise.  They remind me of my favourite footballer of all time, Denis Law, who would score a goal then, with defenders scattered around him in despair, would stand still with one arm aloft, index finger in the air, as if saying “that is who I am”.

In terms of teenage identity Jeff was also perfect.  As far as I know I was the first person in my year at school to discover him, he was as moody and petulant as any adolescent, and he chose to define himself rather than be beholden to anyone.  The story of the Rolling Stones trying to hire him ends with him stealing away from Rotterdam in the middle of the night just leaving a note under someone’s door.

A man that can walk away from the biggest band in the world is one thing but the ability to redefine himself musically is another.  The rock/blues of his Yarbirds years then Truth and Beck-Ola gave way to the soul and funk of Rough and Ready and the eponymous Jeff Beck Group albums. Then there was the ill-fated Beck, Bogert and Appice supergroup but it always seemed that Jeff needed to be free to play what he wanted with whoever he wanted whenever he wanted. 

The moment I realised he was for life was when he persuaded me that fusion jazz/funk with no singer could be a pleasure on Blow by Blow and Wired. He challenged my narrow musical horizons and dared me to come on his journey. It’s been a lifetime pleasure to go along for the ride.

I could write a book on finding and discovering the delights of each album in turn.  There is an intricacy to the playing that sucks me in but also an ability to cut through with a bold riff or unexpected sound that delights and thrills.  He is never boring.

I eventually got to see him play live in 2007 at Ronnie Scott’s for one of the performances enshrined on “Performing this week…Live at Ronnie Scott’s” and I was there the night that Imogen Heap guested.  My proudest fan moment was in the gents bathroom where I was able to break the news to another acolyte that Jeff had played a on a new version of 54-46 Was My Number with Toots and the Maytals.  It’s a breathtakingly good solo reflecting his ability to play with empathy, touch and taste whatever the song.

Over the years I saw him at the Royal Albert Hall (terrible acoustics), where Dave Gilmour came on to trade solos, the O2 where he did a solo show then sat in for a song or two with Van Morrison, and here in San Diego where he played much of the Loud Hailer album.  I also saw  him guest with ZZ Top on his birthday and would swear that I can hear myself screaming with glee on the record as Billy Gibbons introduces him.  My adoration knows very few bounds.

What’s not to love?  Well, I’m still not sure, for many reasons, about his teaming up with Johnny Depp and Hi Ho Silver Lining remains a grim reminder that he couldn’t sing.  But he was a patron of Folly Wildlife Rescue Trust and even had a hobby reconstructing hot rods from scratch.

As for the terrible joke at the start, I am sitting here listening to my With Jeff mix where he appears playing guitar alongside Tom Jones, Lulu, Seal, Toots, LeAnn Rimes, ZZ Top, Tina Turner, Buddy Guy and many others.  Best not to be mutt when you can listen to Jeff.  Thanks for the music, the memories and everything.

A Civil Action

In the film A Civil Action, Jan Schlichtmann says, “The whole idea of lawsuits is to settle…”.1  There is no settlement yet but the court case between2 the University of South Florida (USF) and INTO University Partnerships (INTO) has been closed and further dispute resolution is planned.  USF has dropped the case with the claim it has achieved the outcome it was seeking from its initial action.   

Its Notice of Voluntary Dismissal3 on 3 January 2023 says that at the receivership hearing on 16 December 2022, the “evidence submitted by the parties proved Defendants, INTO USF LP and INTO USF, Inc., are taking the actions that the Financing Corporation’s declaratory judgment lawsuit sought (i.e., acknowledging the termination of the Stockholder agreement, gathering and protecting the Joint Venture assets, budgeting to fund the teach-out, and winding-up the joint venture).”  In the transcript of the hearing the judge, The Honorable Darren D. Farfante, made broadly the same points while declining USF’s motion to appoint a receiver4.

It seems likely that further discussions between the parties will be conducted in private but after two previous failures there remains the possibility that these will be unproductive.  Most importantly for some observers is that students, including a group arriving in Spring 2023, are being taught out.  The transcript also tells us that the joint venture board has hired Berger Singerman, “to provide the joint venture with advice regarding the operation of the business during a wind-down, to provide advice regarding corporate governance matters and fiduciary duties.”

Presuming that wind-down results in the eventual closure of the joint venture it will leave INTO with six pathway joint ventures in the US from the eleven that have been started since 2008.5   

Joint Venture PartnerOpened/AnnouncedJoint Venture Closed6
Oregon State University2008 
University of South Florida20092022
Colorado State University20122021
Marshall University20122020
Drew University2015 
George Mason University2014 
St Louis University20152021 (became 100% INTO owned
University of Alabama – Birmingham2015 
Washington State University20172022
Suffolk University2017 
Illinois State University2018 

Last Orders7

While the case regarding the teach out and wind down of the joint venture has closed the flurry of claims and counter-claims suggests there is still plenty to be resolved.  In this respect there are some helpful insights based on how the case might have developed according to a Joint Case Management Report filed on 6 December 20228.  The document summarizes the dispute and then goes on to outline key areas of activity ahead of being ready for a trial in February 2024 if the case had gone ahead.

The process includes witnesses to be deposed (up to 30 fact witnesses and four expert witnesses) and “an alternative dispute resolution” by the end of second quarter 2023.  Other key dates in 2023 include selecting a mediator by 1 April, deadline to identify experts by 7 July, and expert discovery closure by 6 October.  The expert testimony focused on the financial status of the joint venture, including its solvency, on 21 April 2022, and “alleged damages to the INTO parties.”

A recent article in Business Law Today made the point that the “median duration of a joint venture is ten years” and suggested that “all joint ventures end—so plan for it.”  The trajectory of traditional pathways in the US is uncertain and this may not be the last closure, so universities considering joint ventures as a way forward may want to pay close attention.  Another data point could be the reported settlement resolution with a total value of “around $6.4m” passed by Washington State University Board of Regents in July 2022 after the university’s relationship with INTO changed. 

NOTES

This blog recognizes the complexity of the case and is not intended to reflect any view on the merits of either plaintiffs or defendants.  References for filings are given in order that readers can seek further insight if they wish.  Any amendments on matters of fact are welcome from authoritative sources.   

  1. The film is based on a 1995 book which tells the story of a real court case about environmental   pollution in Massachusetts in the 1980s.
  2. The case in the Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County, Florida Circuit Civil Division is formally between USF Financing Corporation (plaintiffs) and INTO USF LP and INTO USF, INC.  The Consolidated Lead Case is 22-CA-006001, Div. L.  Filing numbers below relate to this case.
  3. Filing # 163938884 E-Filed 01/03/2023
  4. Filing # 163938229 E-Filed 01/03/2023
  5. Hofstra University is omitted – there is no listing in the INTO University Partnership report and accounts indicating it is a joint venture.  All other entries in the grid are taken from publicly available information or observation of websites at the time of launch/closure.
  6. Closures are rarely the subject of public announcements.  Any authoritative amendments to these dates are welcome.  In several cases the relationship has changed to become a direct recruitment rather than joint venture pathway arrangement.
  7. Last Orders is a 1996 Booker Prize-winning novel by British writer Graham Swift.  Its title relates to the Last Will and Testament of Jack Dodds and the instructions therein, but also to “last   orders” the common call in the UK for final orders of drink before a public house closes.
  8. Filing # 162471158 E-Filed 12/06/2022

Image by Chris Sansbury from Pixabay 

“Speak Because You Can”…Act Because You Should

News that the Taliban have “..banned women from universities in Afghanistan” has been condemned by the UN Security Council and many other countries.  US Secretary of State, Antony J. Blinken said, “The Taliban cannot expect to be a legitimate member of the international community until they respect the rights of all in Afghanistan.”  We wait to see whether the board of Times Higher Education (THE) makes a statement1 or chooses to impose any prohibition on Afghan universities in its rankings.

It’s A Man’s Man’s Man’s World2

Bologna Topco Ltd, the parent company of THE World Universities Insights Ltd, Data HE Ltd, The Knowledge Partnership and BMI Global Ed Ltd does not have a single female director.  This lack of diversity was noted as far back as May 2021 following a presentation by owners Inflexion Private Equity but nearly two years later it’s the same names and faces in charge.  Any action could come down to whether two men who have quietly become among the most powerful and influential in higher education think there is a duty to stand up for the rights of women.

THE World Universities Insights Ltd is the parent company’s main trading entity and has two directors – Paul Howarth and Paul Ransley (who also sit as directors on Bologna Topco).  Since 2020 it has been the vehicle for purchasing data analytics company dataHE, student recruitment event operator BMI Global Ed, HE consultancy The Knowledge Partnership – with each company purchased having the same two directors.  Adding the purchase of InsideHE in early 2022 has, arguably, given Howarth and Ransley unprecedented power to form opinion and control data in global higher education3.

Some will claim there is editorial independence but Howarth’s statement about a response to the “invasion of Ukraine by Russia” shows the symbiotic link between the rankings, the news outlet and the other businesses.  InsideHE has run two THE led opinion pieces (28 April and 12 October) on rankings since being acquired earlier this year which might suggest the penumbra of Rupert Murdoch style influence.  It’s an intricate web so it is appropriate to suggest that, “with great power comes great responsibility” and the THE should both speak up and act.         

What’s Up?4

The THE methodology clearly “reserves the right to exclude universities that ….are no longer in good standing.”  Regrettably, decision makers at THE obviously do not think that Russian institutions explicitly supporting a brutal, rapacious, illegal attack on a neighbouring country is grounds for losing “good standing”.  One might hope that the complete exclusion of women from higher education presents good grounds for immediate action.

While no Afghan universities have made it to the World University Rankings 2023 the Impact Rankings provide fertile ground for manipulation as institutions can choose which of the United Nations Sustainable Development Goals to focus on.  Bakhtar University and Kabul Polytechnic University rank with around 650 other universities on a ranking of 1001+ in the most recent Impact Rankings with other Afghan universities featuring in 2020 and 2021.  One of the four scoring categories for Bakhtar University is the individual SDG measure 5 – Gender Equality, which the THE notes, “SDG itself phrases…explicitly as supporting women”.

The need for an intentional and purposeful ban is urgent because the data used in compiling the rankings are substantially self-selected by the institution and up to two years out of date.  For example, the April 2022 Impact Rankings were, at best, using data from December 2020 but it may have come from January 2019.  Universities also choose which three SDGs to provide information for (with only SDG 17 obligatory) which is probably why no Russian universities chose SDG 16 – Peace, Justice and Strong Institutions for their 2022 entries.

Laugh It Off5

We may be best not to hold our breath on the THE standing up for women’s rights.  One part of the reasoning from Paul Howarth, chief executive, not to exclude Russian universities from THE rankings was that, “we would expect Russian universities’ performance to be impacted negatively by the actions of the Russian government.”  Those who understand the ranking considered that statement to be dubious, detached and likely ill-founded at the time and they have been proved correct.

More Russian universities were featured in the latest THE World Rankings 2023 (103) than the equivalent for 2022 (100) with more in the top 800 (14) than the year before (12).  While the top university, Lomonosov State University dropped by five places the chart below shows that year on year it did much better than several non-Russian institutions with similar ranking in 2022.  The overall volatility shows the complete nonsense of the university rankings but also the vacuousness of the chief executive’s stated expectation.

University THE World Ranking 2022THE World Ranking 2023Year on Year Rise(+)/Decline(-)
Wuhan157173-16
Aberdeen158192-34
Colorado Boulder158148+10
Lomonosov158163-5
Catholique de Louvain162170-8
Durham162198-36
Ottawa162137+25
SUSTech162166-4

The publicity value for Russia is even greater in the THE Impact Rankings where the number of Russian universities listed increased by 25.3% from 75 in 2021 to 94 in 2022.  In the latest THE Reputation Rankings the number of Russian university also increased, year on year, from five to six with the top ranked institution rising from 38 to 35.  By any objective measure the THE Rankings appears to continue to reward Russian universities and the Russian government that supports them as a tool for credibility and prestige.

Which Side Are You On?6

University ranking businesses like THE and QS World University Rankings and service providers like Study Portals seem willing to continue promoting universities that accept or even actively support repressive regimes.  While other commercial businesses have taken direct financial hits from withdrawing their involvement in Russia the rankers and recruiters continue to promote them even at the possible expense of students being drawn into the armed conflict.  The rankers may prefer to prevaricate or to ignore Russia’s actions but drawing a line in the sand over something as fundamental as women being allowed to study in higher education should be a simple decision. 

Notes

The home page of the viewfromabridge blog includes a quote from a DACA recipient.  The full quote is, “Speak because it’s your life, speak because you can”, which should remind everyone who has the freedom to comment that they should speak up for those who are repressed, endangered or unable to represent themselves.  If you have the power you should also take action on their behalf.

The sub-headings are all titles from songs written wholly or mainly by women.  

  1. As far as I can find in a search the Times Higher Education has published one news item by Pola Lem on this issue (21 December).  No Opinion Piece has been published or statement made by the organization.
  2. Betty Jean Newsome was co-writer of this song, made famous by co-writer James Brown, and is credited with the lyrics by most sources.  For all the macho posturing it’s worth listening to the end of the song “He’s lost in the wilderness, He’s lost in bitterness, he’s lost lost”
  3. In addition to the direct control listed Times Higher Education has partnerships with companies including Study Portals (student aggregator), SI-UK (student recruiter), Liberika (student aggregator) and Casita (student accommodation provider).  A previous blog has noted the role of Study Portals in encouraging students visiting THE Student to apply to universities in Russia.
  4. Performed by 4 Non Blondes and written by lead singer, Linda Perry.  On the backstorysong.com  podcast she comments on the song, “It’s like, ‘Why does it always seem like either I’m struggling, or there’s some f–king political mess happening? Why is this all happening in the world?’’  Under some circumstances who wouldn’t “pray every single day, for revolution”?
  5. Laugh It Off is by Russian feminist protest and performance art group Pussy Riot.  It is reported   that Pussy Riot are currently touring Europe and demonstrating solidarity with Ukraine.  Readers will make up their own mind about the group’s philosophy, tactics and messages but it is difficult to disregard their commitment and their bravery in challenging a “political system that uses its power against basic human rights.”
  6. “Which Side Are You On?” is always a good question.  The song was written in the 1930s by Florence Reece in response to intimidation by the Harlan County Coal Operators’ Association and the sheriff’s department, led by Sheriff J.H. Blair, who acted as its enforcers. Sometimes you have to make a choice.

Image by Dimitris Vetsikas from Pixabay

The image is of a statue in Parliament Square, London, which honours the British suffragist leader and social campaigner, Dame Millicent Fawcett. The statue, erected in 2018, was Parliament Square’s first monument to a woman and also its first sculpture by a woman.