Egyptian investment bank EFG Hermes has announced that its Egypt Education Fund, focused on the country’s K-12 sector, was oversubscribed with total investments of USD 119 mn in its first close – through its private equity arm – exceeding the initially targeted USD 50-100 mn, Invest-Gate reports.

EFG Hermes stated that the oversubscribed capital was raised over six months only, while witnessing a strong interest from an array of international investors, including high-net-worth individuals and institutional investors from Egypt, the GCC, and Southeast Asia, according to an official statement on December 23.

According to the statement, the second close is set to be finalized in 2019, whereby the firm targets raising an additional USD 30 mn in capital.

“The fund targets to deliver [an internal rate of return (IRR)] exceeding 25% for investors and to deploy, alongside GEMS, USD 300 mn over the coming three years to develop a portfolio of 30 schools with a total capacity of 40,000 students,” read the statement.

In addition, EFG Hermes clarified that the fund, with an investment value of USD 150 mn, is part of a USD 300 mn education platform built in collaboration with Dubai’s GEMS Education, one of the world’s oldest and largest K-12 private education providers.

In its statement, the investment bank also stated that it is currently holding talks with several global financial institutions to express interest in subscribing to the remaining ticket.

Speaking on the firm’s achievements, Head of Asset Management and Private Equity at EFG Hermes Karim Moussa noted, “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.”

Meanwhile, EFG Hermes’ board of directors “agreed to seed USD 15 mn 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 support Egypt’s recovery after a period of subdued investment activity bringing in good foreign direct investment flow into one of Egypt’s most promising and socially important sectors,” the investment bank concluded.