Booz & Company This document is confidential and is intended solely for  the use and information of the client to whom it ...
The GCC private school market today has 1.4M students, projected to grow to 2.6M students by 2020 10/27/11 Source: Booz & ...
The GCC private school market’s tuition spend is currently US$5.2 billion, projected to grow to US $16.8 billion by 2020 1...
Population growth, higher national enrollment rates, and shifts to higher fee segments will drive the market’s growth GCC ...
The GCC private school landscape is not homogeneous - there is a wide variety of curricula and tuition fees  30.5% 10/27/1...
Individual markets are at varying stages of maturity 10/27/11 Factor Source: Booz & Company analysis GCC Private School Ma...
GCC governments have taken several significant steps to support the private school market in recent years 10/27/11 Source:...
The emergence of school networks within the GCC Private School market highlights two distinct geography-based operator str...
GCC Parents are clear in what they want from private schools 10/27/11 Most Critical School Attributes  (August 2011 Parent...
GCC National Parents demonstrate a clear preference for single-gender education and specific curricula 10/27/11 GCC Nation...
Significant obstacles must be overcome for the market to reach its full potential 10/27/11 GCC Private School Market Chall...
The GCC Private School market can realize its full potential – If stakeholders work together 10/27/11 GCC Private School M...
Upcoming SlideShare
Loading in …5
×

Private Investment Opportunities In Education Booz And Company Bfe Mena 2011

1,258 views

Published on

0 Comments
2 Likes
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
1,258
On SlideShare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
0
Comments
0
Likes
2
Embeds 0
No embeds

No notes for slide
  • [PLACEHOLDER TEXT]
  • [PLACEHOLDER TEXT]
  • [PLACEHOLDER TEXT]
  • [PLACEHOLDER TEXT]
  • [PLACEHOLDER TEXT]
  • [PLACEHOLDER TEXT]
  • [PLACEHOLDER TEXT]
  • [PLACEHOLDER TEXT]
  • [PLACEHOLDER TEXT]
  • [PLACEHOLDER TEXT]
  • [PLACEHOLDER TEXT]
  • Private Investment Opportunities In Education Booz And Company Bfe Mena 2011

    1. 1. Booz & Company This document is confidential and is intended solely for the use and information of the client to whom it is addressed. Abu Dhabi, October, 2011 Market Overview A Decade of Opportunity The Coming Expansion of the Private School Market in the GCC
    2. 2. The GCC private school market today has 1.4M students, projected to grow to 2.6M students by 2020 10/27/11 Source: Booz & Company analysis 2010 GCC K-12 Private School Enrollment (000’s, Nationals and Expatriates) 76 (6%) Qatar 177 (13%) Abu Dhabi 191 (14%) Dubai 198 (14%) Kuwait 725 (53%) Saudi Arabia Total = 1.4M Projected 2020 GCC K-12 Private School Enrollment (000’s, Nationals and Expatriates) Total = 2.6M 120 (5%) Qatar Dubai Kuwait Abu Dhabi 290 (11%) 255 (10%) 1,680 (64%) Saudi Arabia 271 (10%)
    3. 3. The GCC private school market’s tuition spend is currently US$5.2 billion, projected to grow to US $16.8 billion by 2020 10/27/11 Source: Booz & Company analysis 1,210 (7%) Qatar 1,610 (10%) Abu Dhabi 2,143 (13%) Dubai 2,562 (15%) Kuwait 9,280 (55%) Saudi Arabia Projected 2020 GCC Private School Tuition Spend (US $M) Total = US $16.8B 433 (8%) Qatar 550 (11%) Abu Dhabi 843 (16%) Dubai 1,109 (21%) Kuwait 2,241 (43%) Saudi Arabia 2010 GCC Private School Tuition Spend (US $M) Total = US $5.2B
    4. 4. Population growth, higher national enrollment rates, and shifts to higher fee segments will drive the market’s growth GCC Private School Market Growth ILLUSTRATIVE 10/27/11 <ul><li>Increasing share of total enrollment going to private schools due to regulatory and policy shifts in key markets </li></ul>12.5% CAGR Expatriates Nationals <ul><li>Natural population growth amongst Nationals </li></ul>K-12 Population Private School Enrollment Rate Market Growth Drivers US$ B 2020 16.8 6.5 Inflation 2.7 Shift to Higher-Fee Segments 4.8 Private School Enrollment Rate 2.4 K-12 Population 1.7 2010 5.2 2.8 Source: Booz & Company analysis <ul><li>Tuition fee increases due to economic growth and resourcing pressures </li></ul>Inflation <ul><li>Migration of Nationals from public and low-fee private schools to higher-fee private schools </li></ul><ul><li>Increased share of knowledge economy expatriates seeking highly-resourced schools </li></ul>Shift to Higher Fee Segments
    5. 5. The GCC private school landscape is not homogeneous - there is a wide variety of curricula and tuition fees 30.5% 10/27/11 Note: Low-Fee schools offer tuition levels of <$US 3.2K; Mid Range schools offer fees of $US 3.2K- $US 8.1K; Top Range schools offer fee levels of >US $ 8.1K Source: Booz &Company/YouGov Siraj survey, Booz & Company analysis GCC Private School Landscape (Segment by Curricula, Tuition Fee Level) Tuition Fee Range Top Range Mid Range Low-Fee MoE Western Asian Curricula 7.9% 1.8% 30.4% 1.3% 25.9% 10.1% 22.6% Abu Dhabi Market Overview (Enrollment by Segment) Dubai Market Overview (School Distribution by Segment) 0.8% 0.8% 28.2 % 2.3% 10.7% 9.9% 16.8%
    6. 6. Individual markets are at varying stages of maturity 10/27/11 Factor Source: Booz & Company analysis GCC Private School Market Life Cycle AD USA Australia Kuwait Qatar Dubai ILLUSTRATIVE KSA Introduction Growth Maturity <ul><li>Low demand </li></ul><ul><li>Fragmented supply </li></ul><ul><li>Emerging regulatory system </li></ul><ul><li>Rapid demand growth </li></ul><ul><li>Products maturing, networks evolving </li></ul><ul><li>Evolving regulatory system </li></ul><ul><li>Stable demand </li></ul><ul><li>Differentiation of products </li></ul><ul><li>Mature regulatory system </li></ul>Demand Supply Regulations
    7. 7. GCC governments have taken several significant steps to support the private school market in recent years 10/27/11 Source: Booz & Company analysis, relevant ministries NON-EXHAUSTIVE UAE (Dubai) Private School Market Support from GCC Governments <ul><li>Direct equity investment in private school market </li></ul><ul><li>Provision of inspection information </li></ul>Kuwait <ul><li>Land provision for selected schools </li></ul><ul><li>Free textbooks for selected schools </li></ul>Qatar <ul><li>Voucher program for Qatari Nationals </li></ul><ul><li>Free textbooks, stationery, health services, electricity and water </li></ul>Saudi Arabia <ul><li>Regulation enabling Nationals to attend international schools </li></ul><ul><li>Financing support for new schools </li></ul><ul><li>Support for national teacher salaries </li></ul>Market Market Support Developments UAE (Abu Dhabi) <ul><li>Business development promotion </li></ul><ul><li>Licensing process development </li></ul><ul><li>Land provision </li></ul>
    8. 8. The emergence of school networks within the GCC Private School market highlights two distinct geography-based operator strategies 10/27/11 Source: Booz & Company analysis GCC Private School Networks (by Market Scope and Geography) Saudi Arabia UAE Kuwait Geography Pan-Regional Local Players National Curricula Local Players International Curricula Market Scope Qatar NON-EXHAUSTIVE GEMS SABIS Ma’arif Al Rowad Taaleem IPE SAMA ALDAR Newton ENS Universal Future Education Pan-Regional Operators Single-Geography Operators
    9. 9. GCC Parents are clear in what they want from private schools 10/27/11 Most Critical School Attributes (August 2011 Parental Survey, n = 1,016) Note: Attributes rated as “Very Important” by 70% or more of respondents Source: Booz &Company/YouGov Siraj survey, Booz & Company analysis Quality Teachers (90%) Curriculum (81%) Reputation (81%) 1 2 3 Environment for Children (80%) Preservation of Culture (74%) Value for Money (70%) 4 5 6
    10. 10. GCC National Parents demonstrate a clear preference for single-gender education and specific curricula 10/27/11 GCC National School Gender Preference (August 2011 Parental Survey) Note: Answers to Questions 6B, 6C, 12, and 13 from Booz&Company/YouGov Siraj survey; sample size = 555 Source: Booz &Company/YouGov Siraj survey, Booz & Company analysis Current Considered GCC National School Curricula Preference (August 2011 Parental Survey) Current Preferred 4% 2% 52% 41% 1% 26% 12% 54% Single Gender No Reply 9% Mixed Gender /Separate Classrooms Mixed Gender 65% 26% 8% 4% 36% Indian 2% 6% No Reply Western 1% Other 56% Arabic/Gov’t
    11. 11. Significant obstacles must be overcome for the market to reach its full potential 10/27/11 GCC Private School Market Challenges Source: Booz & Company analysis Insert Text Here <ul><li>National teachers preference for Government schools limits teacher supply </li></ul><ul><li>Competition for talented expatriate teachers limits quality and increases cost </li></ul>Shortage of Qualified Teachers Human Capital Difficult Access to Land <ul><li>Land prices in freehold markets reduce investment return </li></ul><ul><li>Land process is often timely and complex in non-freehold markets </li></ul>Inputs Opaque Regulations <ul><li>Unclear regulatory environment and inconsistent application of regulations in some jurisdictions chills investor appetite </li></ul>Regulatory Environment Lack of Scale and Professional Management <ul><li>Fragmented markets impede scale necessary for efficiencies </li></ul><ul><li>Sole operators often lack management capabilities </li></ul>Difficult Financing Environment <ul><li>Lending practices impede operator ability to secure leverage necessary to finance capital expenditures </li></ul><ul><li>Lack of debt financing increases cost of capital </li></ul>Lack of Market Data <ul><li>Lack of accurate market data increases investors’ risk </li></ul><ul><li>Lack of information concerning school quality hampers parental choice </li></ul>
    12. 12. The GCC Private School market can realize its full potential – If stakeholders work together 10/27/11 GCC Private School Market Recommendations Source: Booz & Company analysis <ul><li>Proactively engage regulators to directly communicate needs and challenges </li></ul>Engage Regulators <ul><li>Market roll-up to consolidate existing players to realize efficiencies </li></ul><ul><li>Consolidate multiple small schools into larger single schools to achieve necessary scale </li></ul>Consolidate Market <ul><li>Institute best practice management structures and procedures </li></ul><ul><li>Identify strategic model and align offerings </li></ul>Professionalize Management Investors & Operators Government <ul><li>Work with financial institutions to increase debt capital available to investors </li></ul><ul><li>Consider direct intervention if market unable to provide sufficient capital </li></ul>Facilitate Capital Access <ul><li>Engage potential investors to promote market opportunities and address regulatory uncertainties </li></ul><ul><li>Increase market information available to parents </li></ul>Increase Regulatory and Market Transparency <ul><li>Provide clarity surrounding property ownership requirements and zoning </li></ul><ul><li>Coordinate with urban planning agencies to ensure sufficient quantity, location, and size of land plots </li></ul>Provide Access to Land

    ×