Africa Capital Group favors education stocks and is investing heavily in this fast-growing sector through three key holdings, according to Ryan Hoover, Portfolio Manager.

The fund’s portfolio includes Curro Holdings, Advtech, and Centum Investment Company.

“For us as investors, the companies in the education sector in which we have invested offer us relatively stable, predictable business models featuring economies of scale, expanding margins and plenty of unmet demand,” said Hoover.

Curro Holdings got its start in 1998 with 28 students in a church vestry.

Today, it operates 115 schools across South Africa and boasts a total enrollment of more than 43,000 learners.

“It has been one of the Johannesburg Stock Exchange’s best-performing stocks since its 2011 IPO. Its share price has soared 491% over the past five years, and, with an aggressive school rollout plan and new investments in tertiary institutions, the company’s future remains bright,” said Hoover.

Advtech, another JSE-listed firm, runs 101 schools ranging from nursery school to college.

Its student enrollment has climbed 13% over the past twelve months thanks in part to a school-leaving exam pass rate of 99%.

Hoover commented: “The company aims to generate 30% of its revenue outside of South Africa by the year 2020, and management plans to double earnings per share by 2018. Advtech stock has nearly tripled in value since the start of 2013.”

He added that while it’s less focused on education than Curro and Advtech, Kenya’s Centum Investment Company aims to become a big player in the sector in the medium term.

In 2015, the company formed a consortium with international school operator SABIS to build 20 new primary and secondary schools.

It also owns a major stake in Longhorn Publishers, East Africa’s leading distributor of textbooks and curriculum materials.

The company is one of the best performers on the Nairobi Securities Exchange, rising 168% since March 2012.

“And school remains very much in session. With burgeoning education demand across the continent, we expect all three of these companies to continue to score well with students and investors alike,” he said.