Cerestra Edu-Infra Fund, the maiden fund of Cerestra, will invest in socially relevant education infrastructure assets across India
Cerestra Edu-Infra Fund Overview
Cerestra Edu-Infra Fund (“The Fund”) invests in socially relevant education infrastructure assets, primarily land and building of K-12 (Kindergarten to Class 12) education institutions.
The Fund pools investments from Indian and offshore HNIs and institutions, invests these in identified assets through its domestic, offshore and Shariah compliant structures, and provides high double-digit returns. These returns comprise recurring yields paid half-yearly, along with capital appreciation at the exit on account of cap rate compression.
The Fund plans to acquire assets in Year 1 and build a portfolio in the next few years, and exit the fund at the end of Year 3 by contributing the portfolio to a listed InvIT.
or more stake in K-12 PropCo is acquired by Cerestra Edu-Infra Fund
Key Target Segment
The Fund has identified K-12 Education Infrastructure as its key growth area, and proposes to invest its proceeds in education infrastructure owning companies (PropCo).
The OpCo – PropCo model in the education sectorAssets are held in a property-company (‘PropCo’), which is leased out to the operating-company (‘OpCo’).
A private limited company that owns all assets, including land, building, equipment, etc.
A trust, society, or section 25 company that operates the school.
The Fund primarily acquires a majority stake (>51%) in K-12 (Kindergarten to Class 12) PropCos
Why K-12 ?
- Ensures 15-years of revenue life-cycle per acquisition
- Has best in-class margins
- Is insulated from economic cycles
- Is a rapidly growing and least-risk segment
Why PropCos ?
- Offer yields at the rate of 11% – 12%
- Have no operational risk
- Hold real estate in the form of land and buildings