Month: June 2021

INTO AT WORK IN A LAND DOWN UNDER*

Rumours of INTO University Partnerships (INTO) striking a deal with the University of Western Australia (UWA) seem to be gathering pace**.  It’s certainly clear that Study Group’s operation aligned with UWA, Taylor’s College, is closing in December 2021 and is currently not accepting any more students.  Meanwhile UWA has announced the opening of UWA College, a new pathway institution, in February 2022 and it sounds as if this could be where INTO has landed its first ‘partnership’ in Australia.

The loss of UWA takes Study Group down to three university partners in Australia, according to its website, but it continues with its links to the top-ranked Australian National University and University of Sydney.  Navitas currently lists 11 Australian partners with only one from the Go8.  Just for the record that’s Adelaide which also appears on Kaplan’s list of three partners. 

INTO’s entry into the Australian fray makes it the newcomer and comes some years after casting eyes at the opportunities .  Discussions with La Trobe (currently a Navitas partner) were fairly advanced in the early 2010’s and there were other flirtations.  The questions – why now and why Perth – would lead to an understanding of whether this is opportunism, an emerging strategy for diversification or a desperate throw of the dice.

The company’s problems with losing partners have been well rehearsed in recent months but there seemed some logic to taking joint ventures accruing debts to INTO out of the portfolio.  While it is doubtful that all the decisions to close were driven by INTO, the remaining partners include some top names in the UK at a point when international recruitment is bouncing back.  Almost every pathway group has had to take some pain with closures in the US so INTO’s troubles there were not uncommon.

It still seems something of a leap to take on a new partner in a country where the company has no infrastructure and limited operational experience.  Even more so at a point when that country has a very uncertain path to being able to welcome international students back in the numbers it once enjoyed.  It’s also reasonable to say that Perth has not historically been the epicentre for international student growth in Australia and that enrollment has lagged behind the country’s impressive upward curve to 2019.

Sources: UWA Annual Report (showing student load) and Australian Department of Education Skills and Employment

While UWA is one of the Group of 8 of top universities in Australia but is also behind some of the more illustrious names in terms of global ranking and attractiveness to international students.  So, even when the borders reopen there is little to suggest that UWA will be at the front of mind for international students looking to find a top ranked university.   All the while, there is also the drumbeat of Australian politicians and pundits who are keen to see the 2020 reduction in international student numbers go down even further to reduce university dependence on international fees. 

 THE 2021 Global RankQS Global Rankings 2022% of international students (THE measure)
University of Melbourne313748
University of Sydney513843
Australian National University592747
University of Queensland624738
Monash University645843
UNSW Sydney674344
University of Adelaide11810829
University of Western Australia1399329
Uni of Technology Sydney16013336
University of Canberra18443636

Business Insider Australia and other publications have set out the broader risks to Australia’s booming international student market as its Government struggles to find ways to allow inward mobility.  UWA has taken the opportunity to roll out $40m in ‘structural cost cuts’, including ‘university-wide redundancies’ while flagging heavy investment in its campus.  All of this plays out against the background of continuing tensions between the governments of Australia and China with the latest spat over the Great Barrier Reef and complaints at the World Trade Organisation being just the latest examples.

It is fair to say that the jury is out on how soon and how robustly Australia will return to the international student recruitment party.  Those who have travelled the scene for many years know better than to write them off and they have overcome dips in enrollments before.  But the resurgence of the UK, the Biden bounce and Canada’s continuing surge means that the competitive market they face will be more challenging than ever before.

All in all the link up, if it is confirmed, seems out of context for a business that has focused so heavily on the US for the past five years.  The geopolitics of the enrollment potential are also difficult to divine at this stage and may make the partnership a harder sell.  It’s going to be interesting to watch and see if INTO find it the “land of plenty” or whether those making the decision will think they’d “better run…better take cover.”*

NOTES

* It’s sometimes irresistible to allude to the mighty Men At Work and their song Down Under which topped charts around the world between 1981 and 1983.  In September 1983 it was adopted as the theme song by the crew of Australia II in their successful challenge for the America’s Cup yacht trophy.

** As always, I would welcome any clarification or correction from an authoritative source at the University of Western Australia or INTO University Partnerships and amend the copy accordingly. 

Image by Katrina_S from Pixabay

INTO THE GREAT WIDE OPEN*

It’s always difficult to know when news is official and when it’s a false start and a case in point is the appearance then disappearance of a new Chief Executive Officer for INTO University Partnerships (INTO) over the course of a few days last week.  It would be invidious to name names publicly at this point but one day the INTO corporate website had a picture and biography then a day later it was gone.  It all happened so quickly that I was pleased to have a conversation with a colleague who had seen the website and could also name the individual.

There doesn’t appear to have been a press announcement about the appointment, but on Wednesday 16 June, the site also had INTO’s co-founder John Sykes listed as Deputy Chief Executive and VP of UK Operations so there seemed to be a nascent structure in place.  More curious is that all of INTO’s pages related to people – and they were extensive – went missing and remain so on Wednesday 23 June.  If you click on the link to Our People it takes you to a bland page about Global Reach – Global Impact, the Leadership Team area on Corporate Information is a desert and the Meet Our North American Development Team section is as blank as untrodden snow.

Any official and authoritative explanation is welcome and I’m happy to provide an update if it is forthcoming.  Perhaps the wider site needed a major refreshing but if so it would be reasonable to see the Marshall Student Center and Colorado State University imagery coming down because those joint ventures have closed.  Anyone who has had responsibility for keeping websites up to date know that it is not for the faint-hearted and requires constant vigilance.  Using collateral from partnerships that have ended feels a little like the corporate equivalent of carrying a torch for a childhood sweetheart. 

The claim of 30 university partnerships in the UK and US also does not square with the logos of nine US partners and nine UK partners.  The relationship with Chinese universities appears to have disappeared from the corporate site but the INTO student site still has opportunities for study at Nankai University.  It’s all pretty confusing.

Only time will tell if the lack of information about leadership reflects a new approach to privacy, a major update or a pending restructure of significant proportions but it’s a good moment to review the task facing a new CEO if or when they are appointed.  Partnership growth has stalled, online capability appears to be behind the curve and the main competition has forged ahead in both areas.  It seems a long way from the growth proposition that encouraged Leeds Equity Partners to invest £66m ($105.8m) for a 25% stake in the business back in 2013.    

Over the past two years INTO has seen the end of joint ventures at the University of Gloucestershire, Newcastle University London and Glasgow Caledonian University in the UK as well as Marshall University, Colorado State University and Washington State University in the USA.  The company invested in School Apply in early 2020 and closed it a year or so later.

The INTO Annual Report for the year ended 31 July 2020 was for a year before the full impact of the pandemic was felt on 2020/21 enrolments and suggested little growth.  Adjusted turnover (which removes discontinued operations) was up 3% to £202k while adjusted EBITDA fell 9.1% to £26m.  Overall, the intercompany debt from joint ventures to INTO had increased by around £8m to £44m with the Centre’s closing listed as debtors to the tune of around £11m.

After entering the pathway market with a ground-breaking joint-venture model at the University of East Anglia in 2006, INTO leveraged its model with great initial success in the US at Oregon State University from 2008.  There have been no new partners in the UK since the University of Stirling in 2014 and the most recent pathway additions in the US was Hofstra University announced in January 2019.  Shorelight adopted many aspects of the INTO model and has forged ahead to be the dominant partner of American universities since its founding in 2013.  Long-term players like Kaplan, CEG, Navitas and Study Group and upstarts like QA Higher Education and Oxford International have scooped up the most recent UK university pathway partnerships.

INTO’s purchase of SchoolApply may have been the start of a foray into the world of online delivery but it is no longer active and there is little evidence of significant advances in this area.  This is at a point where Study Group is moving forward with Insendi, Kaplan Open Learning has online partnerships with Essex and Liverpool, CEG Digital has an established stable of partners and even Oxford International has been making waves with its Digital Institute.  In the US, Shorelight has made a great deal of its delivery through the Shorelight Live platform and appears to be repositioning as a business delivering technological solutions to student problems.

One way of looking at things might be to suggest that the reduction in partnerships has been a deliberate step by INTO to clean up some joint ventures that had struggled to make headway in a competitive market.  The growing level of indebtedness from these joint ventures to INTO might suggest that they were not making adequate progress but it does seem as if several decisions were university driven.  The latest closures are part of history that includes the closures of partnerships with St George’s, University of London, and UEA London which undermines the original notion of long-term joint ventures providing greater stability than third-party pathway providers.

It’s something of a strategic head-scratcher and the loss of academic ‘supply’ comes at a tipping point where both the US and UK are demonstrably back in the game as far as international student demand is concerned.  The lack of a viable online option seems to put INTO at a disadvantage in delivering to a market where increased flexibility and option has become the norm and is likely to grow in future years.

Perhaps there is a mega-deal on its way and one might guess that Leeds Equity Partner would be pleased to find a way to realise some return after eight years of a holding position.  A possible merger with Shorelight to become a demonstrable lead player in the US seems a long shot but the operating models have some similarities and the online expertise may bring energy to INTO’s portfolio.  Or maybe this is the moment where a stable group generating solid if unspectacular EBITDA could be taken back into 100% ownership by INTO’s founder, Andrew Colin.

It’s all speculation but for an outside observer INTO needs to establish some renewed momentum if it is to fulfil the promise of its early days of innovation, creativity and energy.  There’s been substantial investment in talent at the top level and perhaps a new CEO is the final piece in the jigsaw.  Only time will tell.

Image by Anemone123 from Pixabay 

* Fans of the mighty Tom Petty will know that Into The Great Wide Open is co-written with Jeff Lynne and charts the progress of Eddie as he “went to Hollywood, got a tattoo”, “made a record and it went in the charts” to the time “their A&R man said, ‘I don’t hear a single”.  It’s the old story of “rebel without a clue”, to overnight success, to uncertainty when “the future was wide open”.      

Amendment on 1 May 2023: The earlier version of this blog suggested that Andrew Colin, founder of INTO, might take the business “private”. It has been amended to clarify that this was intended to suggest he might choose to take it 100% back into his sole ownership

AN ENGLISHMAN ABROAD MOUNTS THE PELICAN

The exit from pandemic lockdown seems as long and complex as the lockdown was abrupt and simple.  A few months of outdoor eating have turned into another few months of indoor seating but the masks remain.  Anti-vaccine campaigners are as prolific as pandemic deniers and concerns about variants veer from the hysterical to the comforting.

The much bigger and more dramatic news is that I have turned from a leader in the Peloton resistance to a convert.  I’ve always considered that ‘spinning’ was a traditional cottage industry best left to sheep farmers in the Orkney Islands and that ‘soul cycle’ was just a marketing effort to make spandex sound as cool as Marvin Gaye. Anyone who doubts this logic should consider the relative merits of The Spinners singing Dirty Old Town and Soul Man by the mighty Sam and Dave.

My world vision is of bikes on the open road if they have to exist at all but as a walker and car driver I have my doubts about the value of wheeled vehicles powered by somebody’s gluteus maximus, rectus femoris and gastrocnemius.  Add in the red face, body squeezed into lycra and sense of entitlement to the road or pavement regardless of pedestrians and you have a recipe for confrontation.  I understand the benefits to health and the environment but can’t work out why they spoil the good work by being so angry all the time.   

Any prospect of sitting and sweating on a stationary bike alongside a dozen other humans puffing and panting with exertion was my idea of malebolge – the eighth circle of hell.  This was the one where Dante suggested that fraudsters were sent and I can think of nothing more fraudulent than persuading people they enjoyed paying money to be tortured by some screaming sadist with calves made of wurtzite boron nitride.  

But the Peloton arrived two months ago and has outperformed all expectations while being renamed the Pelican for no reason other than they look similar and it sounds funnier.  From being considered an occasional alternative to running and rowing it has delivered a whole new physical, aural and visual experience.  I’ve even found myself recommending its merits to other people which makes me sound like I have totally signed on to the cult.

The instructors are good and you get to pick someone who matches how you feel on the day whether that’s the brutal Olivia Amato and Kendall Toole or ex-Buddhist monk Sam Yo’s five minute warm ups.  There’s a nice chirpy British feel to Leanne Hainsby and Ben Alldis and recent Reddit rankings show a lowest difficult ranking (7.34) for Portland’s Hannah Corbin.  The Reddit list warns me off Christian Vande Velde because he is the toughest (8.67), an ex-professional cyclist who has finished fourth in the Tour de France and sounds scarily like a Bond villain with a plot to take over the world through spinning.

Speaking of Bond reminds me that another great US success, Amazon, has brought access to 007 with its purchase of MGM.  My mind turned immediately to the prospect of home deliveries fulfilling the dream of the 1970s series of ‘all because the lady loves Milk Tray’ adverts.  The prospect of Daniel Craig dropping a Prime delivery of household essential onto the porch while simultaneously disarming brutish henchmen of psychopathic criminal geniuses is surely the best thing that could happen to our lives.

But I also had a soft spot for the notion that Disney would take over the Bond franchise as was suggested by business talk a few years ago.  It is no mistake that Bond’s double O number is seven because I have always suspected that Dopey was quietly spirited away one night and replaced by a deeply embedded British spy with a licence to kill.  It is the only possible reason that he does not have a beard and never speaks – you heard it here first.

The American takeover of a symbol of Britain’s history is something that is doubly on my mind as I approach the fourth anniversary of living in the US.  It’s also more than a year since I have travelled to the UK so the daily influence of the country has had no resistance for some time.  A few signs of underlying change have become noticeable.      

During a walk to Target last week I realized that American shop names now spring to mind before their UK equivalents.  Home Depot comes before Homebase, Nordstrom before Marks and Spencer and Costco before any of the inferior UK warehouse shopping equivalents.  When my ex-retailer mind has shifted to the wonders of the new world’s commerce it’s a moment to reflect on the changes that have crept up without me noticing.

I realised recently that I don’t really hear American accents any longer.  Working in Belfast for nearly two years I was constantly aware of the accent and would occasionally have to ask people to slow down and speak up because an Englishman was in the room.  But my ear has tuned to the tendency to pronounce ‘t’s’ as ‘d’s’ and the range of ‘have a nice days’ and ‘my pleasures’ that are everyday civilities.

The truth is that I can’t get Alexa to understand me unless I adopt some of the speech idiosyncrasies.  I spent several weeks asking her to turn on the outside lights but my insistence on the using the fricative ‘t’ in patio simply caused the Bezos version of computer says no.  Replacing it with a plosive ‘d’ makes me sound like a bad actor in Goodfellas but also has the desired effect of lighting the way.

I have moved into using sidewalk and garbage without wincing and have learnt not to say fortnight without hastily explaining that it comes from the Old English term ‘fēowertyne niht’ and means  fourteen nights.  No doubt I will slide into saying ‘y’all’ and thinking it is normal to take food home from a restaurant because the portions are too big.  There is some way to go before then and it is possible that my return to the home country, vaccination passport or alternative willing, in Autumn (still can’t get used to saying Fall) this year will bring a pause in my Americanization.  We shall see.

Image by Peggy und Marco Lachmann-Anke from Pixabay