By LEE U-WEN

AS scores of companies see their investments sink amid the global financial crisis, Singapore's oldest private education provider has bucked the trend with aplomb.

Despite the difficult investment climate, the Management Development Institute of Singapore (MDIS) managed a 'good record surplus' of almost $20 million last year, its secretary- general R Theyvendran told BT in an interview.

But he revealed that things could have been much worse.

About 18 months ago, well before the global economy nose-dived, auditors told MDIS management the institution was not 'maximising the return on its investments'.

'We listened and took a conservative approach, and so we went to put in $3 million into Lehman Brothers structured products, and we got burned,' he said.

'Thankfully, looking at the big picture, it is a drop in the ocean as far as our reserves are concerned, and we learned from the experience.'

Today, MDIS has cash reserves of $102 million - more than enough for it to begin work on an $80 million, 15-storey hostel at its Stirling Road campus, which will be ready by 2011. A further $20 million will be spent to add four levels to a two-storey administration block to open up more space for offices and teaching.

Even after factoring in a land development payment of $17.2 million to the Singapore Land Authority, Dr Theyvendran expects MDIS to end up with about $50 million in cash reserves by the time the expansion works are completed.

'This is based on revenue of $2 million every month, which means we are asset and cash-rich,' he said. 'We don't have to depend on any loans from banks to pay for our programmes, so this gives us a good advantage over others.'

Having felt the pain of the Lehman investment, he said the institution is taking a 'very cautious' approach to investments.

It has all its money in fixed deposits earning 4 to 5 per cent per annum, rather than in 'higher risk' schemes, even though these could earn as much as 13-14 per cent.

'Everything is now in fixed deposits, and we put our funds in 15 different banks. We are not keeping our cash under the pillow,' said Dr Theyvendran.

With its reserves in a healthy state, the institute is focusing its attention on cost-saving initiatives to help its students stay in school.

It recently launched three programmes - a student grant scheme, a study credit scheme for post-graduates and a merit scholarship - that will help up to 850 local and foreign students complete their education without worrying about school fees and repaying study loans.

The student grant scheme is unique in that it specifically reaches out to retrenched Singaporean students by defraying part of their course fees at two selected partner universities.

Together with three older financial help initiatives, MDIS is committing a total of $20 million to help groom young and old students into 'sought-after talent' when they enter or re-enter the working world, said Dr Theyvendran.

This article was first published in The Business Times .