Despite the fact that the global downturn has virtually hit every sector of the economy, the education sector has largely escaped any major blows; and is beckoning private equity (PE) and venture capital (VC) funds!

According to a “Private Equity Pulse – Education” report by Venture Intelligence - a research service tracking private equity and M & A activity in India – the PE, VC investors are targeting the domestic education firms, after they have noticed a huge potential in the education arena.

Talking about the inclination of the investors towards the recession-proof education sector, Venture Intelligence CEO Arun Natarajan said: “In the current uncertain economic environment, the attractive and predictable rates of return of the education industry, is serving as a magnet for PE investors.”

Statistics indicate that more than 80 percent of fund managers are considering the option of investing in education companies in the coming months. While the education sector has, thus far, seen investments of nearly $300 million; the latent market size for private institutions is expected to be a whopping $40 billion!

Moreover, there has been a clear shift in the education-related investment activity. While it earlier centered on the outsourcing aspect, the present focus is on training institutes offering a domestic market opportunity – as is apparent from the recent investments by Gaja Capital partners, Helix and SAIF.