Growing youth population to open up investment avenues
Manama : With the youth population growing rapidly and disposable income steadily increasing in the GCC, investment opportunities in the educational sector is bound to rise, according to a study by management consultancy Strategy&.
Set to host 65 million youth by 2030, the GCC is set to be very attractive for private investors in the coming years, with the education sector looking especially promising, said Strategy&.
“Over the past decade, a strong market for private education has attracted increasing numbers of investment companies and strategic investors to the education sector in the Gulf Cooperation Council (GCC). This trend will likely continue unabated given the regional growth in student populations, a widespread consumer preference for private education, and governmental privatization initiatives,” the report stated.
In Bahrain enrolments in schools have increased by an average of 6.3 per cent in private schools and 4.4 per cent in public schools since 2009, the study stated.
“Unsurprisingly, the GCC education sector has attracted significant investor interest as it has been developing at a fast pace. The sector ranks second in terms of private equity transactions among all sectors in the Middle East and first in sector rank among education sectors globally. The number of announced private equity and Mergers and acquisitions transactions has increased threefold over the past decade, from nine transactions in the two-year period between 2005 and 2007 to 24 transactions in the period from 2014-2016,” said Ramy Sfeir, partner with Strategy& who leads the family business, investments and real estate practice.
Commenting on the education investment landscape in the GCC, Marc-Albert Hamalian, partner with Strategy& and a member of family business, investments and real estate practice said, “The question for investors is how to capitalize on these opportunities the GCC education sector offers. It will not be enough, to simply buy into the strong market for private education in the GCC and ride its growth as it is typically priced into valuations. Investors will need to identify the investment opportunities best suited to their risk versus return profiles and best determine how to create value. Only those who do this will unlock the full potential of their investments.”
Related Posts