Educational charity the College of Law has sold its legal education and training business to private equity firm Montagu for around £200m.
The proceeds of the sale will contribute to a fund with which the charity – which is set to be renamed the Legal Education Foundation – will use to set up a grant, bursary and scholarships fund for legal students.
A spokesman for the new charity says the Legal Education Foundation will be one of the largest independent educational charities in the UK.
Commenting on the sale, Professor David Yates, chairman of the governors, said the move reflected an increasingly commercial marketplace:
“Over the decades, the College has become the leading professional law school in the UK and now competes in an increasingly commercial marketplace. Given the changing education environment, it was appropriate for the governors to undertake a major strategic review of the best way for the charity to meet this objective in the future. Montagu’s investment will give the College of Law the freedom and support to continue to build its position as a leading professional legal education institution in the UK and internationally.
“We are delighted to have secured a significant fund in perpetuity for the Legal Education Foundation which will be able to focus on the charitable objectives of ensuring the legal education market is fair, diverse and open to all.”
A new company owned by funds managed by Montagu will acquire the entire legal education and training operations of the College. This includes contractual commitments with law firms, as well as “The College of Law” brand and all its accreditations.
The College of Law's most recent accounts filed with the Charity Commission show it has an annual income of £73m.
Speaking to Times Higher Education, Glynne Stanfield, a partner in the education group at law firm Eversheds, which drew up the model used in the sale, said the model could be used to sell by other UK universities, but he added:
"I think sales will be rare. Models could also be used to allow private-sector investment."
He continued: "There will no doubt be many innovative structures developed...as the government seeks to reduce taxpayer funding in higher education".
“If a university were to sell a partial stake to a private investor, it could transfer a portion of its assets to a separate company that could then be bought by the investor. The £200m price for the College shows the value of degree-awarding powers."