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Egypt Education Fund oversubscribed with commitments of $119M: Hermes

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EFG Hermes announced Egypt Education Fund focused on Egypt’s K-12 sector was oversubscribed with total commitments of $119 million in its first close, exceeding the initially targeted $50-100 million.

The company clarified that this fund, with investment value worth $150 million, is part of a $300 million education platform built in exclusive partnership with Dubai-based GEMS Education, one of the world’s oldest and largest K-12 private education providers.

It also stated that the oversubscribed capital was raised in just over six months and has seen strong interest from a diverse group of international investors, including high-net-worth individuals and institutional investors from Egypt, the GCC, and Southeast Asia.

According to the statement, the second close is expected to be completed in 2019, with the goal of raising additional $30 million in capital.

“The fund targets to deliver IRRs exceeding 25 percent for investors and to deploy, alongside GEMS, $300 million over the coming three years to develop a portfolio of 30 schools with a total capacity of 40,000 students,” the statement read.

The company also said that it holds talks with several global financial institutions expressing interest in subscribing to the remaining ticket.

“Our success in raising the substantial equity capital in a relatively short time demonstrates our ability to create innovative private equity products that cater to today’s investor demands. The education sector in Egypt is in dire need of major investments, and together with our best-in-class school operator, GEMS, we expect to make a strong impact in the industry and deliver attractive returns to our investors,” Head of Asset Management and Private Equity at EFG Hermes Karim Moussa said.

“Investors understand that when partnering with us they don’t just benefit from the investment expertise of our team and our ability to devise focused, structured investment vehicles, but can trust that the day-to-day running of the assets will be overseen by a world-class operator and leader in the sector,” Moussa added.

For his part, the fund manager at EFG Hermes Mohamed Khalifa said: “We continue to work closely with GEMS to build Egypt’s largest institutional education service provider and to create a meaningful impact on the schools we operate.”

“Our investment targets are quite ambitious, and we are currently pursuing multiple investment opportunities across the sector with an investment pipeline comprising over 20 schools,” Khalifa revealed.

In May, EFG Hermes in cooperation with GEMs signed an agreement with Talaat Moustafa Group Holding (TMG Holding) to acquire a portfolio of schools in a LE 1 billion ($58 million) investment.

The statement referred that EFG Hermes will funnel the acquired portfolio back to the platform in the coming weeks which will be 50/50 owned by the fund and GEMS.

Meanwhile, the Board of Directors of EFG Hermes agreed to seed $15 million to the fund as part of its strategy to support its growing private equity business.

“With private equity activity in Egypt ebbing over the last few years, the fund’s success underscores the firm’s commitment to supporting Egypt’s recovery after a period of subdued investment activity brining in good Foreign Direct Investment flow into one of Egypt’s most promising and socially important sectors,” it said.

EFG Hermes recorded consolidated profits of LE 767.16 million during the first nine months of 2018, compared to LE 1 billion during the same months of 2017.

Egyptian Financial Group Hermes Holding (EFG Hermes) is a public company, listed on the Egyptian Exchange (EGX) since February 1999.

It operates within the diversified financial sector focusing on investment banking and brokerage. It has 36 subsidiaries operating across the Caribbean, Northern Africa and Middle East. EFG Hermes is based in 6th of October, Egypt, and was established in January 1984.

– EGYPT TODAY

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Education

STEM education in Africa: Essential to the continent’s development

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Matthew Odu

STEM education which primarily revolves around ‘Science, Technology, Engineering and Mathematics’ has become highly sought after by learners all across the world and is crucial in encouraging a nation’s development.

Recent reports suggest that over the next 5 years, STEM jobs will grow by 13% – particularly in the areas of Computing, Engineering and Advanced Manufacturing. This shift in the global labour market should be a central focus of African leaders as the United Nation’s (UN) projections show that by 2035, the working population of the continent will surpass that of the rest of the world.

I join the call led by Stefania Giannini, assistant director-general for education at UNESCO – who has asked governments to put education investment at the centre of their post pandemic recovery. The past 12 months have witnessed the most severe disruption to global education systems in history, which during the peak of the crisis – led to more than 1.6 billion learners out of school. In the global south, school closures are likely to erase decades of progress made by educators.

As education expenditure continues to increase in the west and in the far east, the opposite is true in Africa. Millions of our children are gifted in science, math and physics yet the vast majority are not being given a fair chance to compete in this fast-evolving world. The supply of quality education is lagging behind.

A new report released earlier this week by The Education Finance Watch, jointly commissioned by the World Bank and UNESCO, revealed that two-thirds of low- and lower-middle-income countries have cut their public education budgets since the onset of the COVID-19 pandemic. In comparison the UK’s Department for Education recently announced a new £700M plan to help young people in England catch up on lost learning due to the pandemic and in 2020, public spending on education in China reached 3,633.7 billion yuan.

“The learning poverty crisis that existed before COVID-19 is becoming even more severe, and we are also concerned about how unequal the impact is,” Mamta Murthi, World Bank vice president for human development, said in a statement.

What is the African response?

Recently many of us have been horrified at the images circulating on social media showing dilapidated school buildings in Nigeria, with no infrastructure being led by teachers who haven’t received salaries in months. This is totally unacceptable and should not be tolerated by the educators on the continent.

During a recent HESED webinar themed ‘Next generation School Leadership’ we engaged with teachers in Nigeria who expressed a willingness to push their students more in the classroom but felt the situation impossible without adequate training, modern infrastructure and an improved curriculum.

Fortunately, Covid-19 has not just brought about the need for change, it also points a way forward and for parents, online learning is one of the bright spots. It is safe to say that the success of online STEM education has made a clear case for adopting a hybrid model.

HESED is an initiative and my own personal contribution to providing quality education to Nigerians, as a borderless structure with an unrestricted curriculum. The e-learning platform compliments the current school system by using a national curriculum with the option of studying an international syllabus.

Quality STEM Education is the new normal.

 

By: Matthew Odu, A Fellow of Institute of Chartered Accountant of Nigeria

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Education

The Education System is Broken. Covid-19 may be the cure (Pt. 1)

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Studying From Home (SFH) due to Covid may transform the entire education system (image: 123RF.com)

Institutional procrastination has kept the education sector globally from making long overdue changes to keep up with the ways of our evolving world. However, just like the first minor heart attach that doesn’t kill a person but forces them to finally take their cholesterol level and exercise seriously, Covid-19 might just be the disrupting force to permanently reshape formal education as we know it.

I believe there will be two distinct changes to the system, one that is bound to happen, and one that needs to happen.

In this first article of my two part series on education reform, I’ll discuss the first big change, and the one that we need to get started on right away: a complete revision of the educational curricula writ large.

Consider my daughter Maya. She is 13 years old and in 7th grade, and has 5 more years of school left. Let’s assume that she goes to a 4 year undergrad (ed:she better!) and then maybe takes a gap year before starting her first job. I know from my own experience, that most of us are pretty useless in our first 2–3 years in the workforce. At that time we are just learning the ropes, building the habits of showing up, navigating office politics and developing some sort of competence in our chosen career path. So, even excluding a master’s degree, etc. we’re talking about 12–15 years before she is really contributing to society.

For just a moment, now look back 15 years ago. In 2006: the very first iPhone had not been released. Netflix was still mailing out DVD’s in red envelopes. In that year. Twitter was founded and Facebook was still only for students on college campuses. The EV-1 electric cars had just been destroyed, and the space shuttle Columbia had just blown up upon re-entry. The world was a very different place 15 years ago, and the pace of innovation is still accelerating. That means that look forward to 15 years from now, will be like going 25 years back.

The cost of solar energy has dropped by 97% in the last 25 years. Between abundant solar, and massive projects in geothermal, our kids are going to live in a world biased towards renewable resources for the first time ever. Autonomous cars and trucks will wipe out a huge portion of driving careers, which are currently the no.1 job category 29 of the 50 States in the USA. Even software engineering is significantly changing as the world moves from bottom-of-the-stack system coding, to no-code applications through assembly of existing open-source modules and libraries.

Today’s schools are preparing our kids for a world which will not exist by the time they get there.

Forrester and Mckinsey estimate that almost 40 million clerical and location based jobs will be wiped out in the USA by 2030 due to automation. That is 25% of the total workforce. The Bureau of Labor statistics estimates that 43% of the total workforce in the USA in 2020 are what we now call “gig workers”, self-employed doing short-term task based jobs (like driving an Uber, tutoring online or freelancing).

Of course, new jobs will be created, just as today there are over eight hundred thousand technology jobs in Silicon Valley which did not exist before the digital revolution. However, these new jobs will be in new areas that we can’t currently foresee. As a (depressing) example, there are over 15,000 content moderators whose job it is to just review potentially awful & inappropriate posts on Facebook everyday, a dystopian career choice that was unimaginable 25 years ago.

What is certain though, is that this next generation of today’s students have zero chance of holding a single “cradle to grave” career. They will inevitably exist in a world of uncertainty and change.

Resilience, adaptability, and lifelong learning are the three most important traits we need to be teaching them.

There is little point in teaching “facts”, in a post-Google world. We have externalized knowledge such that any fact, or skill can instantly be learned by watching a few YouTube videos, or reading a collection of articles on Google. What needs to be taught are: curiosity, a passion for learning, and a dedication to cognitive reflection – the practice of thinking beyond an intuitive answer/media message, and considering a potentially less comfortable/intuitive correct answer.

Homeschooling interest peaked with Covid-19 (source: Google Trends)

At the start of the Covid-19 pandemic, Google searches for the term “homeschooling” shot up 400% compared to the previous 5 years. Inquiries to the National Homeschool Association jumped from 5 calls a day before Covid, to 3,400 per day in August. My own family formed a “microschool” taking the choices of teachers and curriculum into our own hands. While health and safety are undoubtedly the primary motivation for this trend, the genie is out of the bottle. Covid has shown us that the same Internet platforms that connect us with a global talent pool of employees, can also connect us with a global pool of amazing educators. My daughter’s Spanish teacher is in Puebla, Mexico. She’s taking a music technology course from the University of Adelaide. My son’s physics teacher is a NASA engineer working on the Mars rover. Thanks to Covid, “School” has transformed from a place where they go, to a thing that they do.

Given the slow bureaucratic nature of most ministries of education, making sweeping changes to the national curricula in “traditional schools” is going to be a 5 to 10 year process. If we are to adapt our systems of learning in time to not waste a generation of students with the wrong lessons, then these changes need to start now.

In part 2 of this series, I’ll discuss the second major coming change: the explosion of the education bundle.

Author: Jay Shapiro, Co-founder & CEO of Usiku Games

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Africa speaks

2020: A year to remember

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Matthew Odu MA Taxation, FCA

The coronavirus pandemic has infected over 70 million people, has caused over 1.6 million deaths and has subsequently led to the suffering and heartache for billions of people the world over.

From an economic perspective, the once in a century event created a slump not seen since the second world war. The International Monetary Fund estimates the global covid-19 cost at $28trn in 2020 lost output.

The pandemic suffering has also been skewed by race. According to The Economist a 40-year-old Hispanic-American is 12 times more likely to die from covid-19 than a white American of the same age. In Britain, an official inquiry found that racism and discrimination suffered by the country’s Black, Asian and minority ethnic people has contributed to the high death rates from covid-19 in those communities.

A topic that is in need of more attention is the injustice felt by students caused by the covid-19 fallout. The past 12 months have witnessed the most severe disruption to global education systems in history, which during the peak of the crisis – led to more than 1.6 billion learners out of school. The United Nations (UN) Secretary-General António Guterres has warned that the pandemic is threatening a loss of learning that may stretch beyond one generation of students. In the global south, school closures are likely to erase decades of progress made by educators.

In Africa, although ed-tech surged during the summer, it wasn’t enough to overturn archaic disparities and make-believe generation next infrastructure. Data suggests that a combined total of just 19 million regular users had access to online education platforms, compared to the at least 450 million children aged 14 or younger that live on the continent.

Fortunately, Covid-19 has not just brought about the need for change, it also points a way forward. Just last week world leaders in education met virtually to help set in motion far-reaching changes to education in the wake of the Coronavirus pandemic.

RewirEdX focused on three main issues in the education sector; youth and future skills, education financing and innovation in education. Leaders driving the change at the event included former UK Prime Minister, Gordon Brown, now the UN’s Special Envoy for Global Education and Julia Gillard, former Prime Minister of Australia & Chair, Global Partnership for Education.

Chief amongst the discussion was the vital importance of connectivity in underpinning effective distance learning and so making education accessible to all.

Giving every single African child access to quality education is one of the visions for HESED. A lack of access to quality education and the sluggishness in adopting new methods of learning has immediate and long-term effects that countries on the continent cannot permit to spiral out of control.

Even before Coronavirus struck, education was in crisis but now we have an opportunity to turn things around.

HESED is an initiative and my own personal contribution to providing quality education to Nigerians, as a borderless structure with an unrestricted curriculum. The e-learning platform compliments the current school system by using a national curriculum with the option of studying an international syllabus.
It’s time to rethink education. Let’s give our children a head start in 2021.

By: Matthew Odu MA Taxation, FCA

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