Pandemic-driven financial struggles have led to forecasts that several English institutions could seek investment from, or sales to, foreign counterparts and private equity firms, with India¡¯s Amity University confirming it is ¡°very open to discussions¡± on a ¡°takeover¡±.

The sale of a traditional English university, in whole or part, would create a huge shock in a sector dominated by charitable institutions, where the handful of for-profit universities are still newcomers.

But the impact of the Covid crisis ¨C in particular on overseas student income ¨C means that a number of English providers could look to radical options on financing, experts suggested.

The attraction for foreign investors or buyers is seen as lying in obtaining the brand prestige of a UK university, and of UK degree-awarding powers, with a view to leveraging that overseas.

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Atul Chauhan, chancellor of Amity, which has around 125,000 students spread across multiple campuses in India, plus a London campus, told?Times ÖйúAƬ?that it was ¡°very open to discussing¡­a takeover¡± with universities.

He added: ¡°Due to confidentiality reasons I am not able to share details of any ongoing discussions.¡±

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Amity is owned by the non-profit foundation of the AKC Group of Companies, which operates petrochemical, technology and pharmaceutical firms.

English private universities with degree-awarding powers have already struck commercial deals as they sought solutions to financial worries. China Education Group last year invested in Richmond, The American International University in London, while Regent¡¯s University London was recently sold to Paris-based for-profit Galileo Global Education.

Glynne Stanfield, head of the international education practice at law firm Eversheds Sutherland, said he knew of ¡°eight or nine private equity or trade buyers¡± that ¡°want to come in and invest?in UK ÖйúAƬ, perhaps by investing in current UK universities¡±.

¡°In addition, a lot of foreign universities are interested in coming to the UK market,¡± he added.

English universities are charities and their degree-awarding powers cannot be directly sold. But the 2012 sale to a private equity firm of the then College of Law established a potential precedent for other universities.?Under the model used in the sale, developed by Eversheds, the college¡¯s charitable status and Royal Charter were separated off, while the degree-awarding powers came under the control of a newly created company, whose ownership transferred to the private equity firm.

Mr Stanfield expected to see ¡°more ÖйúAƬ institutions [moving] from the public to the private sector. That¡¯s certainly going to happen. We¡¯re going to see a ÖйúAƬ sector that¡¯s going to look more like the American market.¡±

He said that ¡°the English student market is a relatively small market in global terms¡±, with the ¡°main reason¡± behind potential foreign takeovers of UK universities being the ability for the buyer ¡°to use the UK degree outside the UK ¨C that¡¯s the big driver¡­It¡¯s the brand.¡±

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Investors or buyers would be interested in the ability to use UK degree-awarding powers online and ¡°the ability to set up campuses outside of the UK, but using the UK degree¡±, he said.

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Others suggested that English universities could seek a different transformative solution as a route out of financial struggle.

Matt Robb, head of education at consultants EY-Parthenon, said: ¡°Universities with poor finances will attract external investment ¨C either foreign universities or private equity ¨C only if their troubles are temporary or at least fixable.

¡°Those with structural issues ¨C small catchments, lack of distinctiveness, underlying indebtedness ¨C are unlikely to attract such interest.

¡°However, alternative options exist for HEIs, notably merger or possibly multi-university groups.¡±

Mr Robb said that if universities were to create multi-university groups, that could potentially allow them to create unified corporate governance while retaining ¡°separate brands¡± ¨C thus avoiding one of the major downsides of a full-blown merger.

Such a move could offer ¡°the potential for very material synergies in cost, revenue and research, allowing small and mid-sized institutions to weather the current storms and create the scale to invest in the digital transition and further growth¡±, he added.

But Mr Stanfield said he did not think there would be ¡°large numbers¡± of English universities ¡°looking to create multi-university groups¡±. He argued that competitive rivalries between institutions and the need to maintain confidentiality on financial and other information, plus pension deficits, were among the key barriers, and that other options could be more attractive.

¡°I think it¡¯s more about looking at other options such as cost-sharing groups, HE-FE-schools groups, and particularly about investment options ¨C both from foreign universities [or] education groups and private equity,¡± he said.

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john.morgan@timeshighereducation.com