US headquartered investment house Safanad and international education platform Global School Management are investing an initial $200 million in the Middle East to acquire education assets and have plans to significantly boost their investment as they expand their portfolio of schools in the region.
The partners will manage and develop several charter, online, early learning and K-12 private schools independently and in partnership with regional governments, the chief executives of both companies said on Wednesday in Riyadh on the sidelines of the Future Investment Initiative.
GSM is already finalising transactions to acquire several schools in Saudi Arabia, the biggest Arab economy, and in the UAE, where it runs iCademy Middle East, a K-12 American online school in Dubai.
These acquisitions would immediately add about 10,000 additional pupils on to the platform, the executives said without giving details.
GSM recently acquired BBD Education in Dubai, a premier provider of professional education services and management for the growing schools market in the GCC.
The platform was established in 2014, with Safanad as a founding investor. It has grown to become an international schools’ operator, serving more than 50,000 students across its 165 schools and early learning academies primarily in the US, Europe and Africa.
Investors are increasingly looking to invest in the education sector of the broader Mena region, particularly in the six-member GCC economic bloc, as governments encourage and incentivise private sector participation in the sector.
The size of the Middle East's education market size is expected to grow to $175 billion by 2027 at a compound annual rate of 8.5 per cent, according to a report by market analyst Industry Arc.
__________________________
Saudi Arabia's Future Investment Initiative 2022 - in pictures
-
Saudi Arabia's ambassador to the US, Princess Reema bint Bandar, speaks at the Future Investment Initiative conference in Riyadh. Reuters -
Noel Quinn, chief executive of HSBC Holdings Plc, speaks during a panel session on day two. Bloomberg -
Kamal Bahamdan, chief executive of Safanad Ltd. Saudi Arabia hopes the FII will put Riyadh on the map as a global destination for deals. Bloomberg -
Nelson Peltz, founder of Trian Fund Management, on day two of the conference in Riyadh. Bloomberg -
Saudi Minister of Finance Mohammed Al Jadaan speaks during a panel event. AFP -
A man in the mirror at the conference in Riyadh. Reuters -
Amin Nasser, chief executive of Saudi Aramco, front row fourth right, and Yasir Al Rumayyan, governor of the Public Investment Fund, front row third right, during day two of the conference. Bloomberg -
Amin Nasser, chief executive of Saudi Aramco, right, during a panel session. Bloomberg -
Yasir Al Rumayyan, governor of the Public Investment Fund, centre right, at the conference in Riyadh. Bloomberg -
Omar Abdulla Al Futtaim, chief executive of Al-Futtaim Group, arrives at a panel session on day two. Bloomberg -
David Grover, chief executive officer of Roshn Real Estate Co, centre, speaks to conference attendees. Bloomberg -
Steven Mnuchin, former US treasury secretary, appears onscreen during a panel session. Bloomberg -
Nabeel Alamudi, president of Olayan Financing Co, on day two of the conference in Riyadh. Bloomberg -
Sheikh Salman bin Khalifa Al Khalifa, Bahrain's Finance Minister, left, and Mr Mnuchin, second right, during a panel session. Bloomberg -
Saudi Energy Minister Prince Abdulaziz bin Salman at the annual Future Investment Initiative conference. AFP -
Princess Reema bint Bandar, Saudi ambassador to the US. AFP -
Jared Kushner, Donald Trump's son in law and founder of global investment firm Affinity Partners, was present. AFP -
Former Italy prime minister Matteo Renzi. AFP -
Saudi Arabia hopes the FII will put Riyadh on the map as a global destination for deals. Bloomberg -
Saudi Arabia also hopes to increase domestic investment through the event. Bloomberg -
Paddy Padmanathan of ACWA Power, centre. Bloomberg -
Lubna Olayan, chairman of Olayan Financing, speaks during a panel session. Bloomberg -
A busy FII conference hall between sessions. Bloomberg -
Jeannette zu Furstenberg, founding partner of La Famiglia venture capital fund, centre. Bloomberg -
Another busy concourse at the event. Bloomberg -
Omar Alsenayen of Jeddah Central Development Company, centre. Bloomberg -
The opening ceremony of the FII conference on a digital screen in the lobby of the Exhibition and Conference Centre at the Ritz Carlton Hotel in Riyadh. Reuters -
Arriving at the conference. AFP -
The queue at the entrance of the FII conference. Bloomberg
__________________________
The K-12 sector is becoming a hotspot for international investments and providers as the segment booms and the policy landscape becomes more favourable for outside involvement, the report said.
“GSM will bring international best practice in education and leverage its innovative technologies and capabilities around school management and development to help expand capacity and enhance the quality of education available in this market,” said Safanad founder and chief executive Kamal Bahamdan.
The move is in line with the global investment house's broader strategy to establish a dedicated, regionally focused investment arm.
The company has set up Safanad Mena, through which it plans to invest across a number of priority sectors.
“This is the first of multiple platforms we plan in areas where we have built market leadership in the US and Europe, and can use our global know-how and network to replicate success and accelerate growth regionally,” he said.
Beyond education, Safanad plans to invest in health care and digital infrastructure, among others.
Investment in the education sector marks the “next phase of growth for Safanad and GSM” in the Mena region, Mr Bahamdan said.
GSM will invest through its subsidiary GSM Middle East and is edging closer to completing transactions in the region, which would “significantly grow our global student base”, said Ron Packard, chief executive of the international education platform.
“We see long-term opportunity for private international education in Mena, where there is strong demand from families for a high-calibre education and a commitment from governments to ensure these needs are met.”
Established in 2009, Safanad, which has offices in New York and the Dubai International Financial Centre, has carried out more than 40 transactions worth more than $10bn in education, health care, digital infrastructure and property in the US and Europe since inception.
