By Yoon Ja-young
Staff Reporter
Foreign private equity funds are seeking opportunities to make money in the lucrative education market.
A number of global private equity funds have invested in the private education market over the last few years. Their investment is expected to hone its competitiveness but concerns are growing that public education at schools might be left behind.
The investments show that private education is not about small private cram schools or ``hagwon'' under careless management anymore ― it has grown into a huge industry.
The Carlyle Group, for example, invested $20 million in Topia Academy, a private institute specializing in English education; TStone invested 60 billion won in Time Holdings, a cram school; Elim Edu, an essay school, got a $13 million investment from Goldman Sachs; and AIG Investment put $60 million into Avalon, an English language institute.
The investment started with cram schools for middle and high school students, but is now expanding to kindergartens and language institutes for adults. Riverside Company, a U.S. private equity fund, recently announced a 20 billion won investment in Wiz Korea that specializes in kids, becoming its biggest shareholder. Wall Street Institute Korea, an English language institute for adults, got a seven billion won investment from Boston Venture Capital and Korea Investment & Securities. It is seeking listing on the Kosdaq next year.
The government has tried to get students to focus on public education at schools, but always lost out to the private sector. Students and parents think that teachers at public schools don't teach as well as hagwon teachers. Also private institutes provide tailored services, teaching students how to score higher. ``My friends often sleep during school classes as they have to study till very late at hagwon. Teachers don't care about it,'' said Yun Suk-min, a high school student from Seocho-gu, southern Seoul.
According to the Ministry of Education, Science and Technology, the private education market was worth 20 trillion won last year. Some, however, estimate the market to be as big as 30 trillion won when including institutes for kids and adults. ``Mega Study, a leader in the private education industry, listed on the bourse in 2004 and has seen its share price soar by about 10 times since then. It is huge,'' said Lee Bum, a famous science lecturer.
Many private institutes have turned into huge enterprises with nationwide franchises and are preparing to list on the stock market. Some of them are even planning to advance into other Asian markets.
President Lee Myung-bak administration's focus on English education is also expected to bolster the private education market.