SOFAZ invests in one of largest private companies providing educational services in world

The State Oil Fund of Azerbaijan (SOFDF) is investing in GEMS Education, one of the world's largest private education providers, founded by Indian immigrants based in a school in Dubai.

Azernews reports, citing Report that the fund, in addition to SOFAZ, Canada's "Brookfield Asset Management Ltd" the consortium led by the investment company, which also includes Dubai-based Gulf Islamic Investments and Marathon Asset Management, will invest in the project.

Financial details of the deal were not disclosed. But "Bloomberg News" previously reported that the Canadian company plans to invest about 2 billion US dollars. This would make the deal one of the largest equity investments in a private business in the Persian Gulf.

"This move will allow CVC Capital Partners to significantly reduce its stake in GEMS five years after making its first private equity investment in the Gulf. However, the company is fully committed to future investments in this attractive region," said Özgür Önder, Head of CVC Middle East.

The transaction is expected to be completed in the third quarter of the year, subject to certain conditions. For Brookfield, this deal will be another investment in the region, which has become increasingly active in recent years. GEMS has also secured financing from a number of UAE banks to finance the transaction, including closing the companies' existing liabilities.

It should be recalled that the beginning of this business dates back to 1959, when the parents of the founder, Sunny Varki, moved to Dubai from Kerala in the south of India. Today, more than 135,000 students study in more than 40 GEMS schools in the UAE. Its expansion over the years reflected Dubai's rise as a major financial center. Dubai, home to a large expatriate population that has grown dramatically since the pandemic, spends heavily on private education — sometimes more than $ 20,000 a year.

This transaction completes the sales process that started in 2022. Varki previously tried to sell part of its stake in 2020, but was unable to attract buyers due to the spread of the pandemic. The company also planned to hold an initial public offering of its shares in London, but this plan did not materialize.

"The investment in GEMS marks an important milestone for Brookfield and our private equity business in the Middle East, underscoring our commitment to investing in this fast-growing region and the strength of our local partnerships," said Jud Ellon, Brookfield's Middle East managing partner and regional head. said.

DeNovo Partners, a boutique founded by May Nasrullah, a former banker of Morgan Stanley, and Goldman Sachs Group Inc. are consultants to GEMS Education. the company performed.

It should be noted that SOFAZ was established by the decree of the President of Azerbaijan dated December 29, 1999, and is an off-budget state institution reporting to the head of state.

The fund collects revenues from the execution of oil contracts, especially from the sale of the state's profitable oil and gas, from transit tariffs for the transportation of oil and gas from the territory of the country, from the leasing of state property, and other revenues. As of April 1, 2024, the assets of SOFAZ amounted to approximately 57.373 billion US dollars.