The document summarizes a panel discussion on trends in the private post-secondary education sector. It introduces the moderator and expert panelists, all of whom have extensive experience in education, law, consulting or investment banking. The major topics discussed include the current investment climate, key regulatory issues, litigation risks, identifying financial risks, M&A trends and case studies. Panelists provide an overview of the sector and discuss factors driving enrollment patterns, transactions and the competitive environment as traditional universities increasingly offer online programs.

1. MODERATOR:
Alexander B. Kasdan, Managing Director, DelMorgan & Co.
EXPERT PANEL:
Keith Zakarin, Partner, Chair of Education Practice, Group Duane Morris LLP
Robert S. Lytle, Partner, Co-Head of Education Practice, The Parthenon Group
Neil Morganbesser, President and CEO, DelMorgan & Co.
TRENDS AND TRANSACTIONS IN
PRIVATE POST-SECONDARY EDUCATION
June 5, 2014

2. 1
Alexander B. Kasdan, Managing Director, DelMorgan & Co., has more than twenty
years of investment banking, real estate, corporate law and corporate strategy
experience. Mr. Kasdan has executed over 100 domestic and cross-border transactions
totaling more than $10 billion in overall volume in a variety of industries. Prior to
joining DelMorgan, Mr. Kasdan founded Convergence Capital Partners, LLC, a
boutique investment banking advisory and real estate investment firm and was an
investment banker at Peter J. Solomon Company, Credit Suisse First Boston and
Merrill Lynch, in New York and Moscow, Russia.
Mr. Kasdan practiced law with O’Melveny & Myers LLP (formerly O’Sullivan Graev
& Karabell LLP) and Paul, Hastings, Janofsky & Walker LLP (formerly Battle Fowler
LLP), where he specialized in mergers and acquisitions, private equity and corporate
finance transactions. In addition, Mr. Kasdan served as Corporate Counsel in charge of
business development at Schlumberger Ltd., a global oilfield and information services
company.
Mr. Kasdan graduated magna cum laude from Middlebury College with a B.A. degree
in Economics and Italian and was elected to Phi Beta Kappa during his junior year. In
addition, he holds a J.D. degree from Columbia University Law School and has studied
at the University of Florence in Italy. Mr. Kasdan is admitted to the Bar in the State of
New York.
Mr. Kasdan is a Senior Advisor to Governance and Transactions LLC, an advisory firm
established in 2003 by Mr. James L. Gunderson, former Secretary and General Counsel
of Schlumberger Limited, to assist boards, management and owners with corporate
governance, compliance, structuring and strategic transactions.
100 Wilshire Blvd.
Suite 750
Santa Monica, CA 90401
+1 (310) 980-1718
ak@delmorganco.com
www.delmorganco.com

3. 2
Keith Zakarin is the chair of Duane Morris' Education
Practice Group and is a member of the firm's Partners
Board. Mr. Zakarin exclusively represents private
postsecondary schools and colleges. His representation of
these schools nationwide includes such diverse areas of law as
student and employee litigation, regulatory and administrative
counseling and litigation, mergers and acquisitions,
accreditation counseling and advocacy, employment
counseling and risk management.
Mr. Zakarin is not just a lawyer representing colleges; he owns
and operates an accredited private college.
Mr. Zakarin is a 1986 graduate of the University of California,
Berkeley, Boalt Hall School of Law, and a summa cum laude
graduate of the University of California at San Diego.
750 B Street, Suite 2900
San Diego, CA 92101-4681
+1 (619) 744-2278
Kzakarin@duanemorris.com
www.duanemorris.com

4. 3
Robert S. Lytle is a partner and Co-Head of The
Parthenon Group’s Education Practice. For more than 15
years, he has led client engagements on general strategy,
performance improvement, and investment due diligence
across a broad spectrum educational organizations. Robert’s
clients include high-growth companies, publicly listed Global
100 companies, non-profit institutions, financial investors, and
international governments. In addition, Robert has
participated in numerous high-profile corporate turnarounds,
mergers, divestitures, and privatizations in Europe, North
America, Latin America, the Middle East, and Asia.
Robert is a frequent speaker at leading global forums in the
education sector. Prior to joining Parthenon, Robert was with
Bain & Company and served as a U.S. Army aviator.
He holds a B.S.E. in Economics from the Wharton School of
Business and an M.B.A., with high distinction, from the Tuck
School of Business at Dartmouth.
50 Rowes Wharf
Boston, MA 02110
+1 (617) 478-7096
RobL@Parthenon.com
www.Parthenon.com

5. 4
Neil Morganbesser is co-Founder and President & CEO of DelMorgan & Co. where he provides
senior leadership within the firm and helps oversee all client engagements. Mr. Morganbesser is also
CEO of Globalist Capital LLC, DelMorgan’s broker-dealer affiliate. Mr. Morganbesser has over 20
years of experience providing financial and strategic advice to a full range of clients, including
entrepreneurs, large corporations, governments, family businesses, private equity funds, and special
committees of public companies.
Mr. Morganbesser has been affiliated with some of the leading institutions in the world, and his
experience ranges from representing the offshore owners in the sale of a small, private U.S. company
for $10 million to representing the special committee of a large, public company in a $9 billion
negotiated management buyout with a highly complex financial structure.
Mr. Morganbesser has truly global experience with the most sophisticated transactions, across a broad
range of industries and in a large number of jurisdictions, as the lead banker on a wide variety of
transactional and other advisory assignments, including domestic and cross-border mergers,
acquisitions, joint ventures, sales and divestitures, restructurings, special committee assignments,
unsolicited acquisitions and hostile defense. With transactional experience in over 30 countries, Mr.
Morganbesser has successfully advised on over 75 transactions.
Until May 2008, Mr. Morganbesser was the head of West Coast and Asia Mergers & Acquisitions at
Bear Stearns & Co., as a Senior Managing Director based in Los Angeles. Prior to joining Bear
Stearns in May 2001, Mr. Morganbesser was an investment banker in the Mergers, Acquisitions and
Restructuring Department at Morgan Stanley (in New York from 1993-1998 and in Los Angeles from
1998-2001). From 1990-1993, Mr. Morganbesser was a corporate and M&A attorney at the
preeminent New York law firm of Wachtell, Lipton, Rosen & Katz.
Mr. Morganbesser graduated with an A.B. magna cum laude in Applied Mathematics / Economics
from Harvard University (Phi Beta Kappa) in 1986 and received his J.D. and M.B.A. degrees (Order
of the Coif, with honors) from Stanford University in 1990.
100 Wilshire Blvd.
Suite 750
Santa Monica, CA 90401
+1 (310) 319-2000
nm@delmorganco.com
www.delmorganco.com

6. 5
ORGANIZER & HOST:
Anna Spektor is the Founder and host of Expert Webcast,
a sophisticated digital source of expertise for the professional
and the business communities domestically and internationally.
Producing the industry’s leading webcast panels covering
corporate, M&A, restructuring and finance topics, Expert
Webcast addresses timely and relevant issues faced by general
counsel, C-level executives, boards of directors, business
owners and their advisors, as well as institutional investors.
100 Wilshire Blvd.
Suite 750
Santa Monica, CA 90401
+1 (310) 995-6579
anna@expertpresence.com
www.expertpresence.com

7. 6
MAJOR TOPICS
• Current investment climate and market in private post-secondary
education
• Key federal and state regulatory issues that affect risk, pricing
and structure
• Student and employee litigation and risk management
• Identification of risk indicia and risk assessment
• Trends in auction activity and related purchase and sale strategies
• Case studies

8. 7
OVERVIEW OF THE POST-SECONDARY SPACE
• Enrollments
o Macro-economic cycle
o Difference between two and four year schools
o Online competition from traditional schools
• Deal activity
o Exiting PE players too long in the tooth
o Smaller schools with exiting owners
o Some large (5,000 students +) that won’t wait any longer
o Regulatory issues driven deals, especially 90-10

9. 8
OVERVIEW OF THE POST-SECONDARY SPACE
• Key federal issues driving deals
o Gainful employment considerations; expensive degree
programs in particular – 90-10 plays, especially training
schools
o Overall nastiness in the space by the feds causing owner
fatigue
o Composite-score driven deals
• Accreditation environment and its affect on deals
o Regionals not willing to play ball on for-profit conversions
(Thunderbird)
o Push at the ED level to federalize accreditation has created a
reactionary climate as the accreditors, particularly the nationals.
This creates instability
o Diligence on placement outcomes important

10. 9
TRANSACTIONAL ENVIRONMENT IN THE POST-
SECONDARY SPACE
• Range of deal pricing
o Auction activity still highest, except in troubled school deals
o Small schools trade at 3-5x EBITDA
o 90-10 plays at significant premiums to EBITDA
o Regulatory clarity has substantial impact on pricing
• Successful deals
• Emphasis on regulatory basics, especially outcomes
• More exotic 90-10 situations pre-cleared with ED more often
• More modeling on GE
• Deep evaluation of student ROI – both good for the overall
value proposition and good for metric compliance

11. 10
WHERE IS THE SECTOR HEADING?
• Differentiation increasingly important
• Persistence, persistence, persistence
• Deeper channel partnerships (e.g., uniformed services and
corporate)
• Innovation toward competency-based degrees
• Price battles

12. THE PARTHENON GROUP
Key Issues and Trends in For-Profit
Higher Education
Parthenon Perspectives
June 2014

13. THE PARTHENON GROUP
2
0.0
0.5
1.0
1.5M
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
5%
15%
('99-'12)
CAGR
-5%
0%
('12-'19)
CAGR
2 Year For-Profit
4 Year For-Profit
0
5
10
15M
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2 Year For-Profit
4 Year For-Profit
2 Year
Not-For-Profit
4 Year
Not-For-Profit
2%
2%
15%
5%
('99-'12)
3%
CAGR
0%
-2%
0%
-5%
('12-'19)
-1%
CAGR
Enrollments: Macro Economics
Enrollments across all institution types are expected to
flatten or decline slightly over the next 5-7 years
H F
Post-Secondary Enrollments, 1999-2019F
Source: Parthenon HED Enrollment Forecast
H F
For-Profit Institution Enrollments, 1999-2019F

14. THE PARTHENON GROUP
3
Enrollments: Macro Economics
Parthenon models post-secondary enrollments using a
number of independent market drivers
Source: Parthenon Analysis
4-Year Not-for-Profit
Enrollment Model
Drivers
4-Year Student
Age-Weighted
Population
Unemployment &
Mean Weeks
Unemployed
Trend Towards
Higher Education
4-Year For-Profit
Enrollment Model
Drivers
Unemployment &
Mean Weeks
Unemployed
For-Profit
Enrollment Trend
Private Sector
Real SG&A
(Marketing spend)
2-Year Not-for-Profit
Enrollment Model
Drivers
2-Year Student
Age-Weighted
Population
Unemployment &
Mean Weeks
Unemployed
Trend Towards
2-Year Education
2-Year For-Profit
Enrollment Model
Drivers
Unemployment &
Mean Weeks
Unemployed
Share of
Enrollment Online
Lower 2 Income
Quintile Access to
Higher Education
2-Year
Undergraduate
Tuition
Not-for-Profit Enrollment For-Profit Enrollment
Private Sector
Real SG&A
(Marketing spend)
4-Year Student
Age-Weighted
Population
2-Year Student
Age-Weighted
Population

15. THE PARTHENON GROUP
4
Enrollments: Macro Economics
Enrollment drivers are fairly common across sub-sectors
and consider underlying factors and recent trends
• Population weighted by age groups relevant to 2-year, 4-year
and post-secondary institutions; more potential students
leads to higher enrollments
• Represents the duration for which workers remain
unemployed; less confidence in job prospects after
prolonged unemployment lowers interest in education
• Unemployed workers traditionally return to school to improve
job prospects
Higher Education Enrollment Drivers
Driver Impact Description/Rationale Models
Weighted Population of
Student Demographic
4NFP 2NFP
4FP 2FP
Unemployment
4NFP 2NFP
4FP 2FP
Average Weeks of
Unemployment
4NFP 2NFP
4FP 2FP
Private Sector Real SG&A • Metric for marketing spend by for-profit institutions; marketing
has a positive impact on enrollment in for-profit institutions
4NFP 2NFP
4FP 2FP
Positive Industry Penetration of
For-Profit Education
• Increasing trend towards attaining post-secondary education
that that impacts for-profits; impact has since started to taper
4NFP 2NFP
4FP 2FP
Share of Enrollment Online • Captures the shift to online learning which benefits
enrollment of for-profit institutions, which over-index online
4NFP 2NFP
4FP 2FP
2-Year Undergraduate
Tuition
• Higher tuition levels discourage enrollment
4NFP 2NFP
4FP 2FP

16. THE PARTHENON GROUP
5
Enrollments: Traditional Sector Competing
Strong traditional brands are now targeting the same
students as the for-profit sector
0
20
40
60
80
100%
All
Universities
Programs
Offered
Online/
Hybrid
Tier-I
Universities
Programs
Offered
Online/
Hybrid
Programs
Not Offered
Online
Programs Not
Offered Online
0
20
40
60
80
100%
Institutions' Online/
Hybrid Status
Not Online/Hybrid
Offerings
Offer
Online Courses
(But No Online
Programs)
Online/ Hybrid
Degree Program
3.6K
Percent of Completions Where
Online/Hybrid Programs are
Offered in Program Area, 2011
Public and Not-for-Profit
Institutions, Percent Offering
Online/Hybrid, 2011
Note: “Traditional Institutions” excludes private sector institutions; Fully online programs denote programs in which there are zero on-campus course requirements for completion; Hybrid program
requirements vary but hybrid programs typically have greater than 60% of coursework offered online; Academic Professionals include Chief Academic Professionals such as Deans or Provosts
Source: Peterson’s Distance Learning Database;; IPEDS;; Deutsche Bank;; School Websites;; Barron’s Ranking of Post-Secondary Schools
Babson Group’s Annual
Survey: Going the Distance:
Online Education in the
United States, 2011:
• 65% of institutions said
online learning is, “a critical
part of their long-term
strategy”
• 67% of academic
professionals rated online
education courses as the
same or superior to face-
to-face instruction
• 70% of academic
professionals believe
students are as satisfied
with online courses as they
are with face-to-face

17. THE PARTHENON GROUP
6
0
2
4
6K
0.3K
2012
Purely
Online
5.5K
107%
2008
('08-'12)
CAGR
$115MEst. Revenue
0
20
40
60
80
100K
2008
27.6K
2012
Purely
Online
82.6K
32%
('08-'12)
CAGR
$523MEst. Revenue
Southern New Hampshire University
Enrollment
University of Southern California
Enrollment
Enrollments: Traditional Sector Competing
Traditional institutions are coming online and when they
act commercially, they tend to thrive…
Arizona State University
Enrollment
Liberty University
Enrollment
0
4
8
12K
2007
2.7K
2012
Purely Online
20.0K
49%
('07-'12)
CAGR
$106MEst. Revenue
0
2
4
6
8K
2010
2.5K
2012
Purely Online
6.5K
61%
('10-'12)
CAGR
$46MEst. Revenue
Source: University financial statements, university websites, Fast Company, Deutsche Bank Report, NYT, Parthenon analysis

18. THE PARTHENON GROUP
7
Enrollments: Traditional Sector Competing
…their brands are powerful…
0.0
1.0
2.0
3.0
4.0
6/2007
6/2008
6/2009
6/2010
6/2011
6/2012
6/2013
Not for Profit
For Profit
Index of Google Searches for Top For-Profit and Not-For-Profit Institutions,
2007-2014
Note: For profit index consists of “University of Phoenix”, “Ashford University”, and “Kaplan University”;; Not for profit index consists of “Liberty Online University”, “Western Governors
University”, and “SNHU”. Indices are indexed to one for the beginning period and represent a rolling 6-week average.
Source: Google Trends
(Liberty, WGU, SNHU)
(U of P, Ashford, Kaplan)

19. THE PARTHENON GROUP
8
Company Select Partners
Enrollments: Traditional Sector Competing
...and they often partner with third party online enablers

20. THE PARTHENON GROUP
9
Regulatory Issues
While all regulatory issues require monitoring, Gainful
Employment (GE) is the primary current issue
Higher Education
Act
Gainful Employment
(as proposed)
Cohort Default Rate
90/10 Revenue
Percentage
Accreditation
Reform
Title IV
Safe Harbors
Regulatory
Status
• HEA is
reauthorized every
few years by
Congress, and is
set to expire this
year
• Unlikely to be acted
on until after the
November midterm
elections
• Limitations
(repayment rates
>45% and/or debt
burdens <8% of
total income) struck
down in 2012
• DoE released new
draft in Dec. 2013;
final draft to be
released in March
before public
comment period
• Three-year CDRs
will be enforced
starting in 2014
• Schools with a
three-year CDR
>30% for three
years will face
sanctions; the 40%
one-year threshold
was unchanged
• No pending
changes
• VA benefits are
included in the 10%
– possibly up for
debate
• Possibility of just
including Title IV
eligible students in
calculations
• Under Sen. Lee’s
(R-Utah) proposal,
states could opt to
set up their own
accreditation
organizations
• New York already
follows this model
• Obama endorses
tying performance
metrics to fed aid
• DOE eliminated 12
“safe harbors” in
2010
• For-Profits
attempting to have
several of those
safe harbors
restored
• Action unlikely in
2014
Commentary
• “I highly doubt
congress will deal
with this in 2014,
even though it is
set to expire.
They’ll wait for after
the elections and
probably just keep
things the same” –
Senior VP, Inifilaw
• “They came back
with round 2 and
came back that
they want stricter
rules because of
the language they
got. This won’t be
good at all for the
for-profits” –
Principal, Ritzert
Leyton
• “They are easy to
manipulate, our
overall takeaway is
don’t be that
concerned, only the
bad schools and
programs will be
affected” – Senior
VP, EDMC
• “The for-profit
graduate schools
have a large
number of students
who don’t take Title
IV funding, so
they’re not really at
risk here” – Former
Federal Regulatory
Affairs Manager,
Kaplan
• “I don’t think
anything will
happen here until
2015, probably
2016 at the earliest”
– Veterans of
Foreign Wars of
The United States,
Legislative
Associate
“I don’t see any
change here in the
near future. They
can’t enforce them
anyway” – Former
Higher Ed Legal and
Regulatory
Consultant, Apollo
Group
Threat to
For-Profits
Source: DOE, PBS, US News and World Report, Inside HigherEd, FinAid, Parthenon Interviews
High Low

21. THE PARTHENON GROUP
10
Regulatory Issues
The current draft of GE regulations place aggressive
thresholds on debt-to-earnings and cohort default rates
Metrics
Annual Debt-to-Earnings (aDTE)
Discretionary Debt-to-Earnings (dDTE)
Program Cohort
Default Rate (CDR)
Population Measured Completers Completers & Non-Completers
Categories and Thresholds Pass: Annual DTE≤8% OR Discretionary DTE≤20%
Zone:
• 8%<Annual DTE≤12%
OR
• 20%< Discretionary DTE≤30%
Fail: Annual DTE>12% AND Discretionary
DTE>30%
Note: 10-Year Amortization Period
Pass: Program CDR<30%
Fail: Program CDR≥30%
Ineligibility Rules
(metrics operate
independently of each other)
A program becomes Title IV ineligible for 3 years if:
• It fails in any 2 out of 3 years, OR
• Does not pass in any 1 out of 4 years (time for
zone programs to improve before ineligibility)
A program becomes Title IV ineligible for 3 years if:
• The 3-year default rate of 3 consecutive cohorts
of students is greater than or equal to 30%
Restrictions • Written warnings to students if a program could
become ineligible for Title IV funds for the next
award year (applies to zone & failing programs)
• Title IV enrollment limited to previous year’s level
for failing programs (or after third year of being in
zone)
• Written warnings to students if a program could
become ineligible for Title IV funds for the next
award year
• Title IV enrollment limited to previous year’s level
if program could become ineligible at the end of
the year
Source: DoE
Must Pass One Metric from Each Column to Pass GE

22. THE PARTHENON GROUP
11
Reasserting Growth
How does the sector get back on a growth trajectory?
Persistence, Persistence, Persistence
1
Focus on the Adult Learner
2
Consolidate and Drive Efficiencies
3
Redeploy Capital
4
Look Towards Services Markets
5

23. THE PARTHENON GROUP
12
0
20
40
60
80
100%
Reasserting Growth: Persistence, Persistence, Persistence
Overall outcomes (for-profit, non-profit, public) are
disappointing and persistence has compelling economics
Sources: IPEDS
0
20
40
60
80
100%
80%+
50%-79%
20%-49%
Less than 20%
3,898
Percent of Institutions with
Given Graduation Rate
Lifetime Cohort Revenue
PercentofLifetimeRevenue
Percent of Starters
Attract More
Increase the
persistence and
graduation rate
Should we start
them?

24. THE PARTHENON GROUP
13
Reasserting Growth: Focus on the Adult Learner
Distinct student groups with different sets of needs can
be reached through innovative course offerings
OnlineOfferings
“Traditional” Students Career Enhancers Self-Directed Learners
Online/hybrid courses for
campus-based first-time
full-time students
Fully-online and
competency-based
degree programs for
adults looking to enhance
their employment prospects
Open-Access Options
(MOOCs, OER, OCW, etc.)
for a wide age range of
students seeking to
accelerate credit
accumulation at a
very low cost
Requirementsfor
Success
• Tight coordination with
onsite courses
• Supplemental student
supports to drive student
engagement
• Continuous starts,
competency options
• Close alignment with
labor market needs
• Quality evaluation
frameworks and testing
policies to allow for
awarding of credits

25. THE PARTHENON GROUP
14
Reasserting Growth: Focus on the Adult Learner
Pushing innovation in competency-based programs while
leveraging channel partners can combat traditional brands
Why a Competency Orientation? Why Channel Partners?
• Supports students desire for a
practical employment focused
education
• Aligns with employer needs while still
providing the “certification” of a degree
• Can support a lower cost structure
• Leverages the channel partners brand
• Long term better student acquisition
model
• Keeps institution attuned to shifting
employer needs and forces a
responsive curriculum and pedagogy

26. THE PARTHENON GROUP
15
Reasserting Growth: Consolidate and Drive Efficiencies
The market is highly fragmented, utilization is low, and
business processes are becoming more crucial
Program
Design
Inquiry Admission Fin Aid Onboarding
Instruction
& Student
Support
Exit
Processes
Accounts
Receivable
Collection

27. THE PARTHENON GROUP
16
Reasserting Growth: Redeploy Capital
Global education markets are fueled, primarily, by rising
household wealth…
Threshold For Private Schooling
90’s 00’s 10’s
PercentofHouseholds
Household Income
Households which
can afford higher
quality education
(primary, secondary,
or tertiary) for their
children
Distribution of Household Income
The relationship between
household income and
attainment of higher quality
education (private schooling)
is not a 1:1. Instead, as HH
income rises over time, the
number of families that are
able to send their children to
private schools increases in
a greater proportion than
household income
As average household income rises, the number of households above
the private education affordability threshold rises more quickly

28. THE PARTHENON GROUP
17
Redeploy Capital
Wherever income is rising, so too is the demand for
post-secondary education
100%
1999
1999
1999
1999
1999
1999
1999
1999
1999
2003
1999
1999
19991999
1999
1999
1999
1999
1999
1999
1999
1999
2000
1999
1999
1999
2003
2002
1999
1999
1999
1999
1999
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1999
1999
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1999
2007
2007
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2007
2007
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2007
2007
2007
2007
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2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
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2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
2007
PPP adjusted GNI per Capita
$0 $20,000 $40,000 $60,000
EnrollmentRatio
0%
20%
40%
60%
80%
Tertiary Gross Enrolment Ratio (GER) vs. Income, 1999 and 2007
(80 countries from around the world)
Note: UNESCO’s Gross Enrolment ratio ISCED 5 and 6. This ratio is calculated using the number of pupils enrolled in International Standard Classification of Education (ISCED) level 5 and 6
representing stages of tertiary education, regardless of age, expressed as a percentage of the population in the five-year age group following on from the secondary school leaving age
Source: BMO Capital Report (2009); UNESCO; World Bank

29. THE PARTHENON GROUP
18
Reasserting Growth: Look Towards Services Markets
Higher education institutions are increasingly embracing
business processes
Note: *Aramark was founded in 1936 and AVI Food Systems in 1961 but it is not known when they started servicing universities
**Bisk was founded in 1971 as a test prep company but did not enter online program development until 1998
Spectrum of University Functions That Have Been Managed by Vendors
(Representative, not Comprehensive)
Document &
Data Storage
Finance &
Accounting
Human
Resources
Financial Aid
& Student
Loans
Information
Systems
Management
Dormitories
Food Service
IT Support Institutional & Operational Support
Enrollment
Management
Academics
Online
Platform
Instruction
Course
Development
Back End Front End Academic Core
ExampleVendors
• XACT Telesolutions (1976)
• Infosys (1981)
• Affiliated Computer Systems (1988)
• Sallie Mae
(1972)
• Nelnet (1977)
• Royall & Co
(1989)
• ESM (1995)
• QuinStreet
(1999)
• InsideTrack
(2001)
• Embanet-Compass
(1995)
• Deltak (1996)
• Bisk (1998*)
• Learning House (2001)
• Academic Partnerships
(2007)
• 2Tor (2008)
• Educational
Housing
Services
(1987)
• Aramark*
• AVI Food
Systems*
1970s-80s 1990s-Today
Inception of
Outsourcing:
?
UniversityFunctions
Marketing &
Recruitment
Student
Coaching
Market Penetration
of Outsourcing:

30. THE PARTHENON GROUP
19
Reasserting Growth: Look Towards Services Markets
There is significant institutional spending in areas that
could benefit from partnerships
Source: Parthenon analysis
Back End Front End
0
20
40
60
80
100%
IT Support
Currently Partner-Supplied
$15B
Finance and
Accounting
$7B
HR
$3B $2B $2B
Admissions
$11B
Development and
Alumni Affairs
$6B
Financial Aid and Student Loans
Endowment Management
$1B
Marketing and Recruitment
Total = $47B
Institutional Support Student Services
Relevant Categories of Post-Secondary Institutional Expenditure

31. THE PARTHENON GROUP
20
What Informs Our Perspective?
Parthenon teams have completed over 900 education
projects in more than 60 countries
Pre-Kindergarten K-12 University
Vocational
and Other
Career and
Professional
Education Sector Projects
Completed by Parthenon
Parthenon Offices

32. THE PARTHENON GROUP
21
What Informs Our Perspective?
Public and private sector work provides a strong
sense of what is happening “on the front lines”
We advise
leading education
institutions…
• Federal, state, and local
educational authorities
• Charter schools, private K-
12 schools, and other
innovative education
providers
• Global post-secondary
institutions
• Foundations on the
forefront of education
reform
…work with the organizations
that help meet their needs…
• Educational publishing
• Testing and assessments
• Tutoring
• Intervention
• Special Education
• Technology providers
• Consumer education
products
…and cover almost every
large and mid-sized
transaction in global markets
• North America
• Latin America
• Europe
• Gulf Cooperative Countries
• Africa
• Asia, Southeast Asia, and
Asia-Pacific

33. THE PARTHENON GROUP
22
About The Parthenon Group and our advisory services
for investing in education
About The
Parthenon
Group
The Parthenon Group is a leading advisory firm focused on strategy consulting, with offices in Boston, London, Mumbai,
San Francisco, and Shanghai. Since its inception in 1991, the firm has embraced a unique approach to strategic advisory
services built on long-term client relationships, a willingness to share risk, an entrepreneurial spirit, and customized insights.
This unique approach has established the firm as the strategic advisor of choice for CEOs and business leaders of Global 1000
corporations, high-potential growth companies, private equity firms, educational institutions, and healthcare organizations.
The Parthenon Group advises clients in all stages of investing in education companies, including target identification and
screening, strategic due diligence, portfolio company strategy and operational improvement, and sell-side support. The
combination of Parthenon’s Private Equity Practice, which has advised clients on more than 1,000 transactions, and our
Education Practice, which has worked across all aspects of for-profit and non-profit education, make The Parthenon Group the
preeminent advisor to private equity firms considering investments in the education industry.
Learn more about us at www.parthenon.com.
Robert Lytle
Partner, Co-Head of Education Practice
robl@parthenon.com
617.478.7096
Executive Assistant:
Deb Spitzley
deborahs@parthenon.com
617.478.6312
Follow Us
for Regular
Updates
Twitter | @Parthenon_Group
Facebook | www.facebook.com/ParthenonGroup
LinkedIn | www.linkedin.com/company/the-parthenon-group
Advisory
Services for
Investing in
Education
Twitter | @Robert_S_Lytle