Private equity in the independent school sector - A case study on how a leading private equity firm apply governance and operational engineering in the Swedish independent school sector

Abstract: This paper describes a case study of the private equity firm EQT and their ownership of AcadeMedia in the independent school sector. The study aims to identify evidence of, and tensions resulting from, EQT's active ownership in the sector. Using previous research on private equity value creation as a starting point, we study how EQT govern and control AcadeMedia. By studying the governance and control in AcadeMedia through deep interviews on all levels of the organization, we find evidence of governance and operational engineering as well as sector related tensions. Since EQT acquired AcadeMedia in 2010, there has been an increased focus on delivering high quality education. As one part of the increased focus, AcadeMedia has developed its quality definition, which has a significant impact on the strategic focus for AcadeMedia. Further, we find that one of the key control systems, perceived quality, is not anchored on a teacher level due to tensions arising from the teaching profession that historically has not been business oriented. In order to mitigate the discrepancy, EQT and top management within AcadeMedia tries to educate the teachers and the principals in leadership, business, and on the importance of quality, which serves as the key value driver in the sector. Our conclusions highlight the tensions and the challenges that arise due to the complexity and dynamics from private equity ownership in the independent school sector.