of Britain’s most celebrated academics have secured almost £10m in a private placement to launch a for-profit university that will charge £18,000 a year in tuition fees.
AC Grayling, the famous philosopher, will become Master of the Bloomsbury-based New College of Humanities, which will offer degrees in English, history, philosophy, economics and law.
He will be joined on the teaching staff by 14 star professors, including Richard Dawkins, the evolutionary biologist; Niall Ferguson, the historian; and Peter Singer, the Australian ethicist.
Cavendish Corporate Finance ran the private placing, which attracted investments from individuals and family funds. There are around 30 investors in the venture, including Grayling and most of the academics. The biggest investor is a family trust, which has a 35 per cent stake.
Charles Watson, the former chief executive of City PR firm Financial Dynamics, is chairman of the venture and a shareholder. He is joined on the board by John Singer, the European chairman of private equity house Advent International.
“The people who have put their money in have invested for the long term. They are not looking to achieve quick returns. This business is going to be around for many years to come,” Watson told City A.M. yesterday.
Watson said the near-£10m fundraising would cover the university’s running costs for the first two years and that the venture plans to break even in year three.
The university will this week sign a lease on headquarters in Bloomsbury’s Bedford Square, and will rent library and lecture facilities from nearby University of London. It will also award University of London degrees, alongside a New College diploma.
The university will start taking applications from prospective students next month, who are expected to have at least three ‘A’s at A-Level, and degree courses will start in Autumn 2012.
Tuition fees will be £18,000 per annum but a quarter of places will be taken by students on 100 per cent scholarships or those paying reduced fees of £7,200. Because New College is a private for-profit enterprise, it is not subject to the £9,000-a-year cap.
The government is keen to encourage private higher education providers in a bid to shake-up the fusty universities sector.
The New College is likely to fill a gap in the market when traditional universities close or scale back arts courses in response to cuts in funding.
MEET THE ADVISER
SIMON Ramery, a partner at advisory firm Cavendish Capital, led the private placing that raised almost £10m for the New College of Humanities.
Ramery, who read law and international politics at Keele University, joined Bank of Scotland (BoS) on graduation, where he spent six years working in the acquisition and leveraged finance team. He was primarily focused on serving British private equity firms. While at BoS he gained membership of the Chartered Institute of Bankers in Scotland.
In 2004, he joined Icelandic investment bank Kaupthing to help establish its acquisitions and leveraged finance business in the UK.
While at Kaupthing, he took the lead on more than 10 transactions, including the £817m public-to-private deal of Matalan and the £750m public-to-private deal of Big Food Group, the company behind Booker Cash and Carry and Iceland Foods.
He joined Cavendish in 2008.
By Phoebe Torrance