Brookfield-led consortium to invest in Dubai’s Gems Education

Investors also include Gulf Islamic Investments, Marathon Asset Management and the State Oil Fund of Azerbaijan

Pupils at Gems Wellington Academy in Dubai. Gems is the largest private education provider in the UAE. Reem Mohammed / The National

A consortium led by Brookfield Asset Management has signed a binding agreement to invest in Dubai-based private school provider Gems Education.

Other investors in the education provider also include Gulf Islamic Investments, Marathon Asset Management and the State Oil Fund of Azerbaijan.

The completion of the deal is expected in the third quarter of 2024, depending on the fulfilment of certain conditions by all parties, Gems and Brookfield said in a joint statement on Tuesday.

Financial details were not revealed, but Bloomberg previously reported that Canadian investment firm Brookfield was planning to invest about $2 billion in Gems.

“We are well positioned for future growth, thanks to a supportive operating environment that is driving record enrolments, underpinned by a strong UAE economy and a growing population,” said Dino Varkey, group chief executive of Gems.

The investment will help the company prepare for its "next phase of growth", he added.

Gems, which began with a single school in Dubai in 1959, is now the largest private school operator in the UAE and among the biggest education providers globally.

It achieved record enrollment levels in the UAE and Qatar last year and expects to exceed 140,000 students in the region by September, a company spokesperson told The National.

The company is expanding its UAE portfolio with new schools opening in Dubai South and Masdar City in Abu Dhabi in August this year, bringing the total number of schools across the UAE and Qatar to 46, the spokesperson said.

Gems said on Tuesday that it has also secured financing commitments from a consortium of UAE banks to fund the transaction and repay its existing financing arrangements.

Its existing minority shareholders, including Khazanah Nasional Berhad, will exit as part of this transaction, and funds managed by CVC Capital Partners will largely exit their stake in Gems.

In 2019, CVC Capital Partners led a consortium that agreed to buy a 30 per cent stake in Gems.

The deal resulted in the exit of an investor group led by Fajr Capital, including Tactical Opportunities funds managed by Blackstone and Bahrain's sovereign wealth fund Mumtalakat Holding Company, which acquired a minority stake in Gems in 2014.

Gems had been considering options for the business after talks to sell a controlling stake to a consortium of Abu Dhabi state-backed entities stalled over valuation, Bloomberg reported last year, citing sources.

Brookfield, which has more than $925 billion in assets under management, has been exploring raising dedicated funds specifically for investments in the Middle East.

Last week, Brookfield teamed up with UAE-backed Alterra to raise up to $5 billion for a climate finance-focused fund that will invest in clean energy projects in emerging markets.

Alterra, a private investment vehicle launched during Cop28, aims to raise $250 billion globally in the next six years to create a fairer climate finance system.

“The investment in Gems marks a milestone for Brookfield and our private equity business in the Middle East, underscoring our commitment to investing in this high-growth region and the strength of our local partnerships,” said Jad Ellawn, managing partner and regional head, Middle East, Brookfield.