School Alumni Help Finance Bond Program to Provide Loans to All INSEAD MBA Students
INSEAD’s entire MBA class will be offered loans to cover the cost of the MBA program as part of a new bond system financed in part by INSEAD alumni, the Financial Times reported this week.
The Prodigy MBA Bond for INSEAD was listed on the Irish Stock Exchange last week, the culmination of a €50m “community education bond” developed by Prodigy Finance, an international education finance firm set up by three INSEAD alumni, according to the FT report.
The plan, developed to provide financing to INSEAD students until 2015, relies on a bond system that takes into account students’ potential earnings as part of a predictive approach designed to reduce risk to investors.
Students from emerging markets who have the most difficulty securing traditional bank loans are expected to find the new program particularly attractive, the FT reports. The program is also expected to appeal to INSEAD alumni who want to help their alma mater and make money in the process, the FT added.
“In these uncertain markets, we have seen strong demand from individual alumni investors and family offices who appreciate the value of a bond,” Ryan Steele, one of the founders of Prodigy, told the FT. “Our current portfolio includes assets of over €5.5 million and has delivered returns of five per cent annually since 2007 despite the economic crisis,” he continued.
For the full Financial Times article, click here.