Leslie Maasdorp: A deep passion for education

2014-08-17 15:00

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Bank of America Merrill Lynch southern Africa president quits to offer his skills in a new area – affordable private schooling. This, he believes, is the way

Leslie Maasdorp quit as southern African president of Bank of America Merrill Lynch in March. After 13 years in finance, he wanted to move on.

This was after private education group Advtech, of which Maasdorp was chairperson, employed a search firm to find a replacement for its chief executive, Frank Thompson. Thompson announced that this year would be his last after 11 years at the helm.

Maasdorp says: “As they publicised the role, I started to think about whether to do it.”

So he threw his hat in the ring and got the job.

He is not necessarily an obvious choice, with a background in finance and economics, but he is on the boards of both Advtech and an NGO involved in education. Maasdorp

believes his interest in and passion for education, as well as his skills in finance, will prove useful.

He knows the business, having been on the board since 2009 and chair since 2010. “You get to know the DNA, the business, the people,” he says. “I don’t need to spend four to six months getting to know where the coffee machine is, or what the key challenges are.”

From October 24, he will preside over numerous up-market private schools and colleges including Crawford, Trinityhouse, Vega and Varsity College. Last year, there were 42?200 students at Advtech schools and colleges, 1?344 of whom passed matric. The schools have a 100% pass rate.

Although it is not a huge company, Advtech and others are making significant inroads in private education as more and more people opt to send their children to private schools.

Some of these have been growing faster than Advtech, specifically the JSE-listed Curro, with which one can make immediate comparisons.

Curro has 33 school campuses and more than 27?000 students, so it is smaller than Advtech. But its growth has been phenomenal. Last year, Curro’s revenue was up by 80% and its headline earnings by 87%. Its share price increased 50% over the past year.

Advtech revenue, in comparison, was up just 5% and its earnings 12%, and growth over the past five years has been up and down. The share price is 12% more than a year ago.

In this fast-growing industry, numerous start-ups are also in the wings. Chinezi Chijioke, the former head of McKinsey’s

African education practice, has started Pioneer Academics, which is set to open schools next year.

Spark Schools, which was started last year by Stacey Brewer and Ryan Harrison, has some schools running and a number in the pipeline.

Fees at these schools vary significantly. Advtech is at the higher end. But the first item on Maasdorp’s agenda is to accelerate growth, and this will be partly achieved by moving into the lower-fee sphere.

Maasdorp, who supports private schooling personally, and whose son was privately educated, says private education is not just for elites, and “the fastest growth is in the low-fee private education space”. It is also a misnomer that private education is for whites only, he says. “That may have been the case in the past – today it has fundamentally changed.”

“The key is to strengthen growth into the affordable low-fee space – a new industry that is mushrooming.”

The Advtech board has decided “to launch and scale in the low-fee arena”, and Maasdorp’s job is to drive it. The fee structure is still under discussion, but fees of around R2?000 a month are likely.

The company can move into low-fee schools relatively easily as “we are an established player with a strong balance sheet – we can scale any initiative we are involved in. The current investment programme is R3?billion over 10 years, at least half of which falls into the low-fee private school category”.

Advtech is also moving outside the border for the first time – targeting countries where English is strong like Ghana, Nigeria, Kenya and neighbouring countries.

Advtech has been criticised for its slow growth but Maasdorp says this is because new companies in the sector grow fast off a low base.

“We have an established, more mature company.”

He believes he can contribute to education in the country through his new job. In emerging markets like South Africa, more and more people can afford quality education, he says. At the same time, the public sector is less and less able to increase investment in education.

“We believe private education has an important role to play in complementing the public sector. Almost one in two pupils drops out of the school system and a million people between the ages of 18 and 25 are not in training institutions. This is at the heart of the crisis around crime and social cohesion.”

He plans to work with government, form new partnerships and improve education.

Another area of focus is technology, which can facilitate cost-effective education. In India, content is loaded on to

tablets, giving a multitude of pupils – who don’t even have access to the internet – access to the full curriculum on iPad-like devices that cost $100 (R1?050) or less.

Better use of technology provides better education, he says.

Healthy Competition

The opposition speaks

Chris van der Merwe, the chief executive of Advtech’s more popular competitor Curro, is aware of, but not concerned about, Maasdorp’s intention to accelerate growth.

Van der Merwe says 12.4?million children attend South Africa’s state, private and church schools. If Curro lives up to its promise to build 80 schools by 2020, it will accommodate just 0.79% of school-children, assuming their number remains the same.

There is more than enough space for everyone, he says – the private-school market is not big enough.

Van der Merwe knows outgoing CEO Frank Thompson and says he has created a stable group. “Although people criticise it for its slow growth, I think it is a great company with lovely schools.”

He does not know Maasdorp personally but says Advtech was right to appoint someone who is not an outsider. The sector is so new there are not many people who understand “it ain’t that easy to build a few schools”. The person needs to understand everything from construction to curriculums and regulations. Maasdorp, he believes, is in a good position to do so.


Maasdorp has a BA from the University of the Western Cape and an MSc in economics from the University of London’s School of Oriental and African Studies. He has worked largely in economic policy development, corporate strategy and investment banking.

He worked for the economic planning, labour and public enterprises departments, Deloitte Consulting, Goldman Sachs, Absa Capital and Barclays Capital. In 2011, he was appointed president of Bank of America Merrill Lynch for southern Africa.

He is on the boards of HCI and Telkom, as well as the Soros Economic Development Fund.

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