Schools out: fund managers snap up Aussie Bush Camps in $60m deal
Journalist: Larry Schlesinger, Reporter. Australian Financial Review.
View the original AFR article HERE.
Fund managers MA Financial, FinCap, and Pengana Capital have closed out 2023 with one of the more interesting real estate plays of the year, after acquiring one of the country’s largest school camp operators, The Great Aussie Bush Camp, for about $60 million.
GABC’s three camping sites at Kincumber on the NSW Central Coast, Tea Gardens on the Mid North Coast, and at Lake Macquarie in the Hunter, as well as the company’s operating businesses, will be added to a new School Camps Real Estate Fund managed by FinCap.
The new wholesale fund, which was offered to clients of FinCap and Pengana, is targeting net total returns of more than 20 per cent per annum. The GABC business generates around $20 million in annual booking revenue from schools and educational groups, while its three sites occupy 73 hectares of mostly freehold land.
These seed assets are part of plans by the fund managers to build a “diversified portfolio of high-cashflow-generating real estate and operating assets focused on school camps and group accommodation in regional locations of Australia for kids and families”.
The highly fragmented school camping sector appears ripe for corporatisation, with family-run owner-operators of single sites dominating the market.
GABC was founded 14 years ago by family members Sarah and Brad Love and Simone and Brad Higgins when they purchased the former Leyland Brothers World theme park near Tea Gardens on the Pacific Highway north of Newcastle.
The 29ha site – best remembered for its scale replica of Uluru – was rejuvenated by the two families as a school camp after the theme park’s collapse. The GABC business expanded in 2012 with the addition of a 28ha site at Kincumber (purchased for $10 million).
A 16ha leasehold camping site – with the option to purchase – at Lake Macquarie opened in February.
According to the GABC website, each year around 45,000 children, as well as teachers, attend camps at Tea Gardens and Kincumber – a number that will grow as these facilities expand. In 2024, almost 70,000 children are expected to attend GABC events.
GABC provides outdoor educational programs and activities such as abseiling, rock climbing, and canoeing. Accommodation ranges from cabins and dorms to permanent tents.
Melbourne-based Fincap, which is chaired by former Olympic rower Christian Ryan, will manage the new fund. The two freehold camping sites were acquired by MA Financial’s asset management business through a company called Edcamps Properties.
MA Financial’s Growth Ventures arm and FinCap Australia will also provide capital to grow the GABC business under its new ownership.
The MA Real Asset Opportunities fund is an investor in the school camps fund.
“We are thrilled to partner with Great Aussie Bush Camps in this exciting phase of their growth,” said Myles Gunter, investment director at MA Growth Ventures.
In promoting the opportunity to their clients, Fincap and Pengana highlighted that more than 80 per cent of Great Aussie Bush Camps’ revenue was recurring through education funding and government school programs, while earnings margins were above 40 per cent.
Fincap also said there are opportunities to increase the capacity of existing sites and roll out new ones.
As part of the deal, the founders of the business – Sarah and Brad Love and Simone and Brad Higgins, who each owned 25 per cent – will remain on the payroll for two years, while the current management team will be retained.
Tom Butler from Nash Advisory helped broker the deal. He said the complex deal had taken over 18 months to negotiate.
“Many times we thought it would fall over … but we were able to persevere and get the job done,” he said.
While Fincap and Pengana have labelled the school camps sector “lucrative” it also has challenges, including the extra expense of paying teachers for being on-call overnight, which has resulted in some schools cancelling camps.
School camp operators (like holiday and caravan park owners) also face the ever-present threat of bushfires,