Where the £25,000 actually goes: the international school operating budget that nobody publishes.

Day 2 of this pillar made a claim that has been hanging in the publication ever since.

We showed that at a typical international school in Bangkok charging £25,000 per child per year, with roughly 1,000 students producing £25 million in annual revenue, the total spend on teaching and support staff comes to 15-30% of fee income. That left a question. Where does the other 70-85% of every fee cheque actually go?

Public schools spend differently. The California public school system, the cleanest comparable data publicly available, allocates 62% of general purpose funding to classroom instruction, 12% to instructional support, 10% to maintenance and operations, 5% to general administration, and the rest to pupil services and other costs. That’s a school system where most of the money reaches teachers and the children they teach.

International schools in Asia operate on a fundamentally different cost structure. Most of the fee income does not reach the teacher in front of your child. It goes to a specific set of categories that the schools systematically do not publish, do not discuss at parent evenings, and do not explain when justifying the next round of fee inflation.

Today’s piece is the structural answer. Where does the money actually go?

The honest framework

International schools across Asia do not publish detailed operating budgets. The annual reports of even the not-for-profit foundation schools (Bangkok Patana, Tanglin Trust, UWCSEA) are typically summary documents that report high-level cost categories without the granular breakdown of where each pound of fee income ends up.

The private equity-owned chains (Nord Anglia, Cognita) publish nothing at the school level. Their consolidated financials are reported at the group level, where the operating margins of individual schools are pooled with regional headquarters costs, debt servicing on acquisition financing, and management fees flowing up to the parent investment vehicles. By the time the numbers reach the public, the school-level cost structure is obscured.

So the analysis here is reconstructive. We know the revenue side (published fee schedules and student numbers). We know the largest cost category (teaching and support staff salaries, as established in Day 2). We know the operating structure of these organisations from job adverts, recruitment materials, and the publicly disclosed strategies of the parent companies. From this, we can build a defensible picture of where the £25,000 actually goes.

The picture is not pretty. It also explains a great deal about why fees rise faster than inflation, why educational decisions feel increasingly distant from the classroom, and why the schools resist transparency on this question.

The seven destinations of your fees

A typical £25 million annual revenue international school in Asia, owned by a private equity-backed chain, distributes its fee income roughly like this. The percentages are reconstructed from industry analysis, the staffing data we established in Day 2, and the typical financial structures of leveraged-buyout-acquired service businesses.

One: classroom teaching and support staff (15-30%)

As established in Day 2. Foreign teachers, local-hire Western teachers, Thai/Vietnamese/Indonesian teachers, teaching assistants, and direct support staff (catering, security, maintenance, basic admin) combined.

For a £25m school: £3.75m-£7.5m. This is the part of your fee that actually reaches the people in front of your child.

Two: senior management and academic leadership (5-10%)

The headteacher, deputy heads, heads of school (separate principals for primary, secondary, and sixth form at larger schools), senior academic staff, and assistant principals. At a school of 1,000 students, this is typically 8-15 senior positions with packages ranging from £80,000-£250,000 each.

The top-tier schools (Bangkok Patana, Tanglin Trust, UWCSEA) pay headteachers £200,000-£300,000+ with housing, education for their children, and full international packages. Even mid-tier international schools pay heads £120,000-£180,000. These are not unreasonable salaries for the responsibility involved, but they add up.

For a £25m school: £1.25m-£2.5m.

Three: marketing, admissions, and communications (8-15%)

This is the category most parents underestimate. Modern international schools, particularly the private equity-owned chains, operate sophisticated marketing departments with regional and global oversight.

Nord Anglia explicitly markets to parents through a structured “Parent Experience Journey” framework with senior MAC (Marketing, Admissions, Communications) teams at school, regional, and global levels. Wellington College Southeast Asia has dedicated regional marketing directors managing budgets across three countries. Director of Admissions and Marketing positions at international schools regularly advertise at USD 60,000-100,000+ with full teams beneath them.

A typical Asian international school of 1,000 students will employ:

• 1 Director of Admissions and Marketing
• 2-4 admissions officers
• 2-3 marketing specialists
• 1-2 communications staff
• 1 community engagement coordinator

Combined personnel costs: £400,000-£700,000 per year. Add advertising budgets (digital, print, expat magazines, sponsored events, school fairs, agent commissions for recruitment from China and India), and the total marketing spend at a £25m school typically runs £2m-£3.5m per year.

This is more than the school spends on Thai teachers entirely. Your £25,000 fee includes roughly £2,000-£3,500 paying to convince other families to enroll.

Four: regional headquarters and group management fees (8-12%)

This is the category that’s invisible to parents but consequential financially. When a school is part of a multinational chain (Nord Anglia’s 80+ schools, Cognita’s 70+ schools, Inspired Education’s growing portfolio), it pays substantial management fees to its parent organisation.

These fees cover regional educational oversight, brand management, IT infrastructure shared across the group, HR systems, finance and accounting consolidation, group purchasing, professional development programmes, and the senior executive compensation at the parent organisation level.

At Nord Anglia, the group operates regional headquarters in Hong Kong, Shanghai, and Boston, with global headquarters in London. Senior executives at these levels receive total compensation packages that, while not disclosed at the school level, are consistent with multinational service businesses in the £500,000-£2m+ range for the CEO and direct reports.

These costs are pushed down to individual schools as management fees, typically as a percentage of revenue. The industry rule of thumb for private-equity-owned multi-site service businesses is 8-12% of revenue flowing to group costs. For a £25m school, that’s £2m-£3m per year flowing out to regional and group headquarters.

Five: facility maintenance, depreciation, and capital projects (10-15%)

International schools operate large physical campuses with significant ongoing costs. A typical Asian international school campus runs 5-20 hectares with multiple buildings, sports facilities (swimming pools, tennis courts, sports halls), theatres, science labs, libraries, dining facilities, and extensive landscaping.

Annual costs include:

• Utilities (electricity, water, internet, gas): £200,000-£500,000
• Cleaning and groundskeeping staff: £300,000-£600,000
• Maintenance staff and contracted services: £200,000-£400,000
• Security: £200,000-£400,000
• Capital depreciation on buildings and equipment: £500,000-£1.5m
• Annual capital expenditure (new equipment, refurbishment): £500,000-£1.5m

For a £25m school: £2.5m-£3.75m. This is the category most defensibly tied to delivering education, although the scale of facility investment at premium schools is often more about competitive marketing positioning (the swimming pool, the theatre, the state-of-the-art science labs) than educational necessity.

Six: debt servicing and acquisition financing (5-15%)

This is the category most parents have no idea exists. When a private equity firm acquires a school chain, the acquisition is typically funded through a combination of equity and debt. The debt sits on the acquired company’s balance sheet, and its servicing costs come out of operational revenue.

When EQT bought Nord Anglia in stages between 2008 and 2017, then sold to the new consortium in March 2025 for $14.5 billion, the financing structure included significant leverage. The interest payments on that debt come from Nord Anglia’s operating cash flows, which means from school fee revenue. Cognita’s December 2024 refinancing involved a €1.26 billion term loan B, which alone generates roughly €50-80 million per year in interest payments depending on the rate.

For an individual school in such a chain, the share of group debt servicing allocated as part of management fees or direct interest costs can reach 5-15% of revenue. For a £25m school: £1.25m-£3.75m.

This is the most uncomfortable line item in the analysis. It means that British expat families paying £25,000 per child are funding, indirectly, the interest payments on the loans private equity firms took out to buy the school. The educational mission of the school becomes secondary to the debt service requirements of its ownership structure.

Seven: shareholder returns and operating margin (10-15%)

The final category. This is what flows to the equity owners as returns on their investment.

For private equity-owned chains, this is the entire purpose of the investment. EQT returned approximately $5.4 billion to its investors when it sold Nord Anglia in 2025, on top of all the operating cash flows it had received during 16 years of ownership. CPP Investments, the Canadian pension fund that co-invested in 2017, is targeting returns commensurate with its private equity asset class allocation, typically 10-15% per year.

For these returns to be possible, the schools must generate substantial operating margins. The industry rule of thumb for premium international school chains is an EBITDA margin of 25-35%, meaning that 25-35% of revenue is available to service debt and provide returns to equity. After debt service (category six above), the remaining 10-20% typically flows to shareholders.

For a £25m school: £2.5m-£3.75m flowing to equity owners.

Even the not-for-profit foundation schools generate surpluses. As established in Day 3, Hong Kong International School has accumulated HK$2.8 billion in reserves according to the Lutheran Church lawsuit. These reserves represent decades of operating surplus that did not flow back to parents as lower fees but instead built institutional capital. The economic effect is similar to shareholder returns, even when the legal structure is technically not-for-profit.

The full picture, in one table

For a typical £25m revenue international school in Asia, the breakdown of where your £25,000 fee per child actually goes:

Sum across the middle of each range and you get roughly the total. The teachers in front of your child receive less than the marketing department that recruited you, in many cases.

This is not a hypothetical concern. It is the structural reality of international education in Asia in 2026.

How the non-profits differ

The non-profit foundation schools (Bangkok Patana, Tanglin Trust, UWCSEA, Singapore American School) operate with a meaningfully different cost structure. The differences matter.

Marketing and admissions costs are typically lower. Non-profit schools with long waiting lists don’t need to spend as aggressively on recruitment. Their costs in this category typically run 3-6% of revenue rather than 8-15%.

Regional headquarters costs are absent. A single-site foundation school like Bangkok Patana has no global head office. Its administrative costs are direct, not allocated.

Debt servicing is typically low or zero. Non-profit schools fund capital projects through accumulated surplus, fundraising, and occasional bank borrowing at modest scale. They don’t carry the leveraged-buyout debt of the private equity chains.

Shareholder returns don’t exist by definition. The operating surplus is reinvested in the institution rather than paid out as dividends.

The cumulative effect: non-profit foundation schools can typically spend 35-50% of revenue on teaching and support staff, compared to 15-30% for the private equity chains. Even at the same headline tuition, more of your fee reaches the classroom.

This is the structural argument for choosing non-profit schools whenever possible, and it’s the explanation for why teacher retention, educational stability, and academic outcomes tend to be stronger at the foundation schools despite their resistance to “premium” branding.

What parents can actually do

The structural information disadvantage facing parents is real. International schools deliberately do not publish detailed operating budgets, and the chains in particular obscure their cost structures through group-level financial reporting.

What parents can do:

Ask the school about its operating budget breakdown. This question will not be answered fully, but the school’s response is informative. A non-profit foundation school will typically share high-level categories proudly. A private equity-owned school will deflect, point to brand materials, or claim commercial sensitivity. The deflection is information.

Ask about the school’s ownership structure and management fee arrangements. If the school is part of a chain, the parent organisation’s website typically lists which schools are members. Ask the school directly: “What percentage of our fees flows to your parent organisation as management or group costs?” Most schools will not answer with a number, but pressing the question reveals which schools are willing to be transparent.

Compare fee inflation against staffing growth. If a school’s fees have risen 25-35% over the last five years (typical for private equity chains), ask whether teacher salaries have risen proportionally. They rarely have. The gap between fee inflation and staff cost inflation is the part of your money that has been redirected to other categories.

Value the non-profits explicitly. As established in earlier pieces, foundation schools like Bangkok Patana, Tanglin Trust, UWCSEA, and Singapore American School operate under different economic incentives. They aren’t perfect, but their structural cost advantage means more of your money reaches the classroom. When choosing between a private equity chain school and a non-profit foundation school of comparable academic quality, the non-profit will almost always represent better long-term value.

The takeaway

International school fees in Asia of £25,000 per child per year are not primarily paying for teaching. They are paying for a complex institutional structure of senior management, marketing departments, regional headquarters, facility infrastructure, debt servicing, and shareholder returns. The teacher in front of your child receives approximately £4,000-£6,000 of every £25,000 fee.

This structural truth has consequences. Fees rise because the institutional pyramid demands they rise. Educational quality is squeezed because teaching budgets are the most pressed-on cost category. School closures and restructurings happen on financial timetables because the underlying ownership is structured around financial returns. Parents have very limited visibility into any of this because the schools don’t publish it and aren’t required to.

The remaining non-profit foundation schools represent a structurally different model. Their fees largely return to the classroom because there are no shareholders, no leveraged debt, and no global headquarters extracting management fees. For British expat families who can access these schools, the long-term value is meaningful.

In the next pieces in this pillar, we look at the demographic shift inside “international” schools (the locals are now the majority at most schools, with implications for British expat children), the cumulative hidden fees that add £20,000-£50,000 to nominal tuition costs, and the fee inflation trap that compounds across the full school career.

The thread connecting all the pieces in this pillar is the same. The international school economy is structured to extract value from expat families on the assumption that they have limited alternatives, won’t ask structural questions, and will continue paying because their employers expect it. Once you understand the structure, the choices become clearer. The first question is always: who actually owns this school, and where does the money go?

Today’s piece has answered the second half of that question. The money goes to marketing departments, regional headquarters, debt servicing, and equity returns, with the classroom getting what’s left over. Worth knowing.