Readers who follow our monthly comparison of the EFP 50 to the S&P 500, have surely noticed the former's surge in the past few months, after several years of tracking or lagging the broader index. For the most part, this is due to the resurgence of the Postsecondary segment, specifically the For-Profit Colleges.

 

Correspondingly, we expect to see more M&A activity with Postsecondary schools in the coming 6-12 months. National University's acquisition of Henley-Putnam above is a great example. Valuations are up mainly due to the new administration in Washington D.C., which has led to changes in regulatory pressure, making it easier for for-profit colleges to do business. Although the segment still struggles from lower enrollments and negative perceptions, many good programs exist providing tangible benefits to students. Many of those programs are likely to test the market now, given improved valuations and what could turn out to only have been a temporary reprieve from onerous regulations. Whether it is temporary remains to be seen, but our conversations in the past few months indicate that there is pent-up demand to sell.