Invest in education: The best sector is higher education (School Investment firms in UAE)

By أغسطس 14, 2022 Blog

Education, among other things, is a powerful social elevator. Investing in the development of higher education learning centers not only promotes social development and mobility, but also has long-term positive returns. Read on for five expert tips to help current and prospective investors in the higher education industry.

 

Education macroeconomic trends

Private education is a rapidly growing market and this is happening in all types of economies. From developed to middle-income countries to emerging markets. In some parts of the world, poor quality public education combined with increasing family wealth and ability to pay has led many parents to seek alternatives to the public sector of school enrollment increased.

Between 1991 and 2003, private enrollment rates outpaced public enrollment rates, especially in certain regions. While figures may vary depending on the criteria used, the market size of the entire private education sector is estimated at US$400 billion, he said.

The private sector (with or without government support) is addressing this gap because governments cannot afford to train everyone who is qualified and wants to be trained. Other estimates suggest that the global education market will reach at least $10 trillion by 2030 due to a combination of population growth and advances in educational technology. According to Holon IQ, over the next decade there will be 350 million higher education graduates and about 800 million her K12 graduates compared to today.

 

Invest in education: an opportunity for private investors

The growing demand for education is not well met by the government. Private sector actors have an opportunity to meet unmet market demands while focusing on investments with high social value.  UBS expects for-profit higher and higher education to grow at double-digit rates each year for the next few years. The private sector also plays a central role in these areas.

Investors in private higher education can expect a positive return on their investment. Funding for private education is certainly a growing business. Overall, investments in education enjoy a higher level of capital protection than other sectors such as technology and some healthcare subsectors. The business dynamics in this sector that will become more pronounced in the medium to long term should also be taken into account.

Therefore, as the education sector is increasingly recognized as a strategic long-term growth prospect, financial institutions are being encouraged to rethink their educational product offerings. Each case is unique, but there are several driving forces that support these types of projects. It often reflects not only what drives investors, but also the environmental characteristics and opportunities of the market in which they wish to invest.

Projects aimed at developing learning centers are often based on the willingness to invest in growth companies with solid financial returns. Education is often a non-cyclical business that provides significant recurring income and steady cash flow. McKinsey research shows that impact investing can be sustainable and meet investors’ financial expectations. It is the combination of these qualities that makes investing in education initiatives such an attractive option.

 

Two areas to focus on while developing a learning center:

The first focus is the development of the school concept.

This part includes the business case and the preparation of his 5-year income statement. The second area of ​​intervention deals with academic content and components.

Ensuring that student experiences reflect intended goals and developing academic structures to achieve desired learning outcomes is critical to the long-term success of a learning center.

This is a very delicate balance, as an institution must have both a financially sound structure and strong academic quality at its core. This work requires a carefully planned balance between academic ambitions and financial expectations.

Invest in education: key aspects to consider

While this balance can be difficult to achieve, the following points will help potential investors focus on the key aspects of developing an education center.

  1. Timing: Planning backwards is key to developing a learning center. It takes a certain amount of foresight to recognize short-term needs, which requires considerable long-term preparation. Certain mandatory activities, such as licensing and certification, can take years to complete.
  2. Education is a long-term, forward-looking investment. When designing a school’s curriculum, it is important to pay attention to which industries and sectors will remain relevant ten years from now. Planning for an institution requires a clear understanding of the “Alumni Profile” that an institution can create. In a dynamic market environment, self-contained organizations must provide students with a framework to develop the soft skills and mindsets that prepare them for jobs that do not yet exist.
  3. Create realistic P&Ls: This may seem like common sense, but it’s easy to be overly optimistic about numbers and projections. Indeed, the launching phase of a learning center requires an abundance of energy and resources. This is true for any company, but even more so for learning centers. Imagine not meeting your first graduates until three to four years after opening.
  4. There is no such thing as “one size fits all”. To remain relevant, educational institutions must respond to real needs, especially those in the labor market. Developing a learning center requires a keen understanding of the industry’s most pressing needs and the expectations and aspirations of students and families.
  5. Education is evolving rapidly, and with it comes opportunity. Consider positioning your institution against peers internationally. Opportunities for collaboration are diverse and not limited to the most typical ‘student migration’ dynamics.

On another hand, let’s take an example Education in the UAE, it is considered as a top priority. The government has made a concerted effort to improve the quality of education in the country, and this has resulted in a world-class education system.

If you are looking for an investment opportunity, investing in education in the UAE is a great choice. The demand for quality education is high, and there are many opportunities to get involved in the education sector.

The UAE is a great place to invest in education. The government is committed to improving the education system, and there is a high demand for quality education. If you are looking for an investment opportunity, investing in education in the UAE is a great choice.

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