EFG Hermes, a financial services corporation in frontier emerging markets (FEM), via its private equity arm, announced today the successful first close of the Egypt Education Fund focused on Egypt’s essential education (K-12) sector.
The DIFC-based fund was oversubscribed with total commitments of $119m, which is above the initially targeted $50-100m.
The $150m investment fund is part of a $300m education platform built in exclusive partnership with Dubai-based GEMS Education, one of the world’s oldest and largest K-12 private education providers.
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.
“Our success in raising the substantial equity capital in a relatively short amount of 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” said Karim Moussa, head of Asset Management and Private Equity at EFG Hermes.
The second close is expected to be completed in 2019, with the goal of raising an additional $30m in capital. Already, the firm is in talks with several global financial institutions expressing interest in subscribing to the remaining ticket. The fund targets to deliver IRRs exceeding 25% for investors and to deploy, alongside GEMS, $300m over the coming three years to develop a portfolio of 30 schools with a total capacity in excess of 40,000 students.
“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” commented Mohamed Khalifa, the Fund manager at EFG Hermes. “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,” he explained.