Best in class: Fundamentals of education-sector investing

CITIUS, Altius, Fortius - Faster, Higher, Stronger may be the Olympic motto, but it also reflects a basic human desire to improve on what has already been achieved. This is precisely the case with education, where parents, be they millionaires or daily wage earners, instinctively want their children to transcend the achievements of previous generations - something that is particularly evident in emerging markets.

Fortunately, education is no longer the preserve of the privileged few and is accepted as a fundamental right. When viewed in investment terms, this makes it a non-discretionary service, or to be more precise: the education industry is emotionally non-discretionary.

Something that is particularly true in countries where the gap between demand and supply is significant - where the median age of the population is young, and the public education system is inadequate. Parents in these territories, therefore, strive to give their children at least a secondary education, if not tertiary.