Tag: finance

Ed InvestmentHigher Ed

In conversation with Eric Pignot

Eric QuoteWhat are your goals for investing into education? Social, impact, financial return?
We are a social private company, committed to offering the best education for the middle class. For us, quality and profitability cannot be opposed. Quality is critical because unsatisfied parents do not hesitate to switch their children to another school. There is strong competition across schools which is also why public schools are losing students. Profitability is also important because unprofitable schools lack the capacity to scale and are therefore unsustainable, no matter how great they are.

Many market entrants find investing into education for the first time a challenging market. What top five factors would you recommend new investors consider before investing into education in Africa?
• Do you want to focus on real-estate or on operations?
• Consider your investment horizon: it may take a few years to create and fill a school
• How can you hedge against currency fluctuations?
• What is your level of knowledge about local regulations and laws?
• How structured is the private school? Is it incorporated? Does it have management processes and  accounts? Is the infrastructure secured for long term?

How does doing business in Africa differ to the other markets that you have worked in?
• Communication is challenging because of network quality
• Owners are less mature in terms of business understanding than other markets, and have a strong attachment to ownership of the equity; so often deciding to own a small school rather than taking a minority share in a larger schools is better
• The informal market space is huge -schools are not always incorporated, do not always pay their taxes, do not always have proper accounting mechanisms

Numerous entities have preconceived ideas about investing in education.
What’s the greatest misconception about investing in education, and what’s the reality?

The greatest misconception is that education in Africa should be not for profit. The middle class market is very competitive, and schools have to offer the appropriate quality for the right price to attract parents.

Which geographies hold the greatest potential for investment?
All geographies! Unsurprisingly, private education enrolment rates correlate well with GDP per capita.

Early years vs K-12 vs Higher vs Vocational –
Where is the greatest need and where’s the best return?

Needs are all across the spectrum! I would say the best return are in higher ed and K12 to provide solid foundations and offer a gateway to tertiary. Vocational provide jobs, yet the challenge is to create a sustainable competitive advantage.

About Enko Education Investments
Enko Education is building a pan-african network of private schools by investing in schools with strong academic and growth potential and helping them to achieve this potential. To do so, we are developing a  central platform that brings both economies of scale and expertise to our schools. We currently have operations in Cameroon and South Africa, in both French and English speaking countries. By Eric Pignot, Co-Founder & COO, Enko Education Investments

Eric Pignot