Harry Breidahl

Catalyst Education

Background & Investment Thesis

Catalyst Education is a leading private provider of vocational education and training (“VET”) with a focus on key social sector skills including early childhood education and care, aged care and disability care, and although predominantly Victorian-based, has a growing presence in New South Wales.

We invested in Catalyst Education with a view to building a transformative leader in VET with a focus on key social sectors. With its impressive reputation, strong values-aligned management team and market-leading position in Victorian early childhood training, we saw Catalyst Education as the perfect entry point to build from. It was core to our belief that structuring Catalyst Education as a not-for-profit would provide us with opportunities to create deep mutually beneficial partnerships with values-aligned not-for-profit care providers. Our discussions with these providers as part of our diligence gave us high conviction that the significant current and future workforce needs presented a large opportunity in training. Regulatory changes are an ever-present risk in VET, however the outlook is positive and Catalyst Education is well placed with a demonstrated track record of quality.

Investment Summary

Focus Sector
Skills Education
First Investment Date
April 2021
FPIP Fund
None (investment prior to Fund 1)
Investing Instrument
Subordinated Debt (into not-for-profit)
Invested Capital
$17.1m

The Problem in Numbers

17,000

Estimated Aged Care workers required per year over the next decade “just to meet basic standards of care”

30,000

Estimated new early childhood educators needed over the next 5 years

120,000

Estimated current shortfall in disability workers nationwide

58%

Of Australians in residential aged care live in understaffed homes

Social Impact Theory of Change

Because...

…of care sector workforce shortages and instances of poor training standards driven by funding structures that incentivise providers to deliver the bare minimum…

we believe...

…our most vulnerable Australians (the young, the elderly and the disabled) are frequently not receiving a standard of care that they deserve…

so we provide...

…excellent training for Catalyst Education’s Learners, while concurrently advocating for improvements in standards and further professionalisation of the care sectors…

that leads to...

…improved skills and career progression for our Learners and Staff, while providing care sector employers with graduates that will fill their significant skills shortages…

and results in...

…a more adequately equipped workforce and ultimately clients experiencing excellent, ongoing high quality care.

Quality
Inclusion
Advocacy & Influence
Financial Sustainability
Great People
Goals
  • Raise the quality of the learning experience for all Catalyst learners.
  • Ensure all clients of Catalyst learners experience excellent, ongoing high quality care.
  • Make Catalyst's learning model as accessible to as many learners as possible.
  • Improve standards and increase value placed on high quality care, compassion, and education, in the care sectors.
  • Build an evidence base to inform practice and advocate for change.
  • Generate a surplus over and above what is required to meet senior debt and social note obligations, to reinvest in further initiatives and fulfil our purpose.
  • Catalyst graduates and Catalyst staff have a satisfying career in the care sector.
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Further Case Studies

Summer Housing

We partnered with Summer Housing on behalf of capital partner the Paul Ramsay Foundation and alongside The Impact Fund (“TIF”) managed by Conscious Investment Management (“CIM) to purchase 82 specialist disability accommodation (“SDA”) apartments in 8 properties. Since July 2020, our capital partner has committed $19m (of total $54m) in capital.

Supply of new housing to meet demand for disability accommodation continues to grow since the creation of SDA and its associated contracted payments under the NDIS in 2016. However, despite these incentives, the residual SDA supply shortfall at ~12,000 places remains significant. 

Some operators entering the market are focused on maximising profit by meeting bare minimum standards to receive the SDA income stream. As a mission-driven not-for-profit, Summer’s developments are of the highest quality which we believe will drive ongoing strong demand and lower than industry average vacancy rates. We believe that this focus on quality will enhance, not detract from financial returns as a result.

Explore Case Study
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Our Social Impact Fund I will open to new investors shortly, following a successful first close of $67m in December 2021.

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Target Fund Size
$150 million
Fund Structure
Closed-end Unit Trust
Fund Term
10 Years
Return Target (Post Fees)
9-10% p.a.
Real Asset Allocation
40-60%
Management Fee
1.5% p.a.