Palamon exits Cambridge Education Group for 14.6x return


college education graduatPalamon Capital Partners has made a return of 14.6 times from the exits of its stake in Cambridge Education Group (CEG), which was sold to Bridgepoint.

The lower mid-market firm has made a capital gain of £141m and an IRR of 58 per cent. This was the sixth exit from Palamon’s €670m 2006-vintage fund, which has so far generated a return of 3.6 times and an IRR of 28 per cent.

CEG currently has more than 3,000 academic students compared with 460 in 2007 when Palamon first invested in the company.

During Palamon’s ownership, CEG saw its revenues jump fivefold to £90m for the academic year 2013-14. The firm noted that this growth was exclusively organic.

Palamon managing partner Louis Elson said, “We are very proud of having played an important part in building CEG into a leading brand with a dominant position in the education sector. This is a classic ‘breakaway’ Palamon investment.

“We identified an unusual opportunity in a small business context with strong potential and combined it with exceptional management talent to deliver explosive long-term growth.”

In September this year AltAssets reported that Palamon replaced its third fund with a €210m bridge vehicle, which was closed that month.

Palamon managing partner Louis Elson told AltAssets that the fundraising environment was extremely tough and “the most difficult I’ve been through in 22 years.”

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