Miami - TPG Capital, a US private-equity firm announces its intention to invest in Ecoles Yassamine, a chain of private schools in Morocco.
Sources close to TPG revealed to the Wall Street Journal that David Bonderman who chairs TPG and Mo Ibrahim who chairs TPG’s African partner, Satya Capital Ltd, will pay a reported US$25 million (MAD 250 million) to become minority stockholders at the famous Ecoles Yassamine.
Robert van Zwieten, Chief Executive of the Washington-based Emerging Markets Private Equity Association believes that “more firms are seeking to capture opportunities presented by the emerging middle class in Africa. There is a vast need for social infrastructure in Africa.”
According to the WSJ, Ecoles Yassamine has 6,000 studentes in six schools at the moment, and they charge close to $3,500 a year per student, which is a higher amount than Moroccan’s average income of $3,020 per person.
Morocco’s Ministry of Education is reportedly aware of the education needs in the nation since studies have shown that school attendance rose 10% (7.38 million students) from 2007-2014. The use of private institutions consequently had a much higher increase of 81% to 973,000 attendees by 2014.
Since private education is considered expensive to the average Moroccan, Ahmed Benyahia, Chief Executive of Ecoles Yassamine said: “We are looking at new models in which we could provide different education options – and fees – for families” namely $1,000 per year.
Regarding TPG’s recent investment in Morocco, the firm’s managing partner (TPG Growth) Bill McGlashan shared his outlook in an interview: “We believe we can build a business that is substantially bigger than Ecoles Yassamine is today. The sheer demand makes it very compelling.”
The private-school sector investment has encountered some opposition since nonprofit, antipoverty organizations who fight for “universal free education” have stated the problem in Africa’s education stems from “a lack of state funds.”
Mo Ibrahim, TPG’s African partner agrees to the lack of resources but defends the investment declaring “that is why there is room for the private sector,” reported the WSJ.
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