Our Investment Strategy
CSGF is seeking to secure $160 million in investments in a new fund ("Fund II") to accelerate the growth of high-performing CMOs across the country over the next five years. Based on the early track record of success of our portfolio, we are focused on increasing both the scope and number of CMOs serving students across the country.
CSGF believes that there is an opportunity to increase the number of students who are attending high-performing schools managed by CMOs ten-fold in the next decade. By 2020, we project that there could be over 200 high-performing CMOs that serve over one million students nationally. If CMOs can continue to deliver their existing level of performance with low-income students, they have the ability to increase the number of these students who are making it onto college dramatically, potentially providing well over 10% of the total low-income students matriculating into higher education each year nationally.
CSGF believes growth in the CMO sector will come from the following avenues:
- Expansion of Existing, High-Performing CMOs. As the groups in our portfolio further develop their capacity, we believe that many of these organizations will be able to grow at a more significant pace, including expanding into promising new geographies.
- Development of New CMOs. As the charter school sector has matured over the past few years, more individual schools have emerged as CMO candidates based on outstanding performance at one or two schools. Our analysis indicates that there are three times as many high-potential, high-performing individual charter schools today compared to our first market survey in 2005.
- Creation of New Models. CMOs are beginning to leverage technology to create school models that are more effective and efficient. For example, we see operators emerging that use online computer-based platforms coupled with talented teachers to deliver more effective individualized instruction at lower costs. Learn more about our Next-Generation Investment Strategy.
CSGF plans to invest Fund II in approximately 40-45 high-performing CMOs over the next five years. CSGF will target CMOs in different growth stages, from high-performing small groups operating a small number of schools that are seeking to scale for the first time to maturing organizations with a track record of running multiple schools that need capital to grow even faster. We will continue to use our rigorous process to screen prospective candidates based on their track record of results in order to maximize our chances for a positive investment outcome.
