GFH Financial Group, the Bahrain-based Islamic investment bank, plans to invest $200 million (Dh734m) in the privately-owned schools sector through its new investment platform, Britus Education.
The bank has "already secured seed K-12 schools in the Middle East for the platform, developed a robust deal pipeline and plans to conclude various acquisitions in the coming months", it said, announcing the launch ahead of next week's World Islamic Banking Conference in Bahrain.
Britus Education platform is in line with GFH’s strategy to "deliver further value for our investors and shareholders and create a positive impact on the quality of education in the Middle East and globally", said Hisham Alrayes, chief executive of GFH Financial Group.
Developed and emerging markets have both seen a surge in private education during the last decade, where population growth and macroeconomic gains have supported the upward trend. The establishment of Britus Education, with a team of experts, will allow GFH to capitalise on opportunities available in the market and help its investors benefit from the industry’s growth.
The company said Britus Education will invest in mid-market schools that can be improved through maximising student capacity, improving academic outcomes and optimising fee structures.
"Britus Education will create for GFH and its investors a pipeline of strong, income-generating opportunities in a defensive sector. It also provides exposure to a sector with high growth prospects and the resilience to deliver steady results regardless of volatility in the investment cycle," it added.
The total number of students in GCC schools is set to grow at a compound annual rate of 2.3 per cent per year to reach 14.5 million in 2022, according to a report published last year by Dubai-based Alpen Capital, citing a growing school-age population, high per-capita income and government initiatives to invest in the sector.
Enrolment in private schools is expected to grow at a compound rate of 4.1 per cent per year until 2022, much faster than the 1.3 per cent growth anticipated for public schools, according to the study.
GFH Financial Group is a Manama-based investment bank with wealth management, real estate development, commercial banking and asset management arms. In the nine months to September 30, net profit to shareholders fell 29 per cent to $73.5m despite a 24 per cent increase in total income to $254m. Total assets of the GFH Group increased to $6.14 billion as at 30 September 2019 from $4.43bn from a year earlier. Its liabilities also jumped by 78.6 per cent to $3.75bn from $2.1bn for the same period, it said in an earnings release last month.
GFH in August acquired six income-generating healthcare properties in the US worth Dh661m. The portfolio of real estate that caters to the needs of senior citizens is located in California, Washington and Michigan.
The deal was done in partnership with Madison Marquette, a Washington-based real estate developer that controls 6 per cent stake in the properties, with 91 per cent held by GFH along with its investors.
With the completion of that deal, the total US real estate transactions volume executed by GFH over the past five years climbed to $1bn, it said at the time.