Nguyen Hoang Group has become well known as the biggest private investor in the education sector.
The group is running 50 education establishments in 18 provinces and cities, from preschool to post-graduate training. As of July 2019, four universities belonging to Nguyen Hoang Group, namely Ba Ria – Vung Tau, Hong Bang, Gia Dinh and Hoa Sen, had attracted 50,000 students.
The strong development of Nguyen Hoang Group shows that investments in higher education are getting increasingly attractive.
Hoang Viet, president of Nguyen Hoang Group, has talked about his ambition to build international universities in Vietnam and turn Vietnam into an international higher education center.
A report released in January 2018 by Hogan Lovells, a law firm, showed that Vietnam allocates 20 percent of the nation’s budget, or $10 billion, for education. With the improved income per capita and the rapid development of the middle class, more Vietnamese families are capable of paying for high-quality education.
|A report released in January 2018 by Hogan Lovells, a law firm, showed that Vietnam allocates 20 percent of the nation’s budget, or $10 billion, for education. With the improved income per capita and the rapid development of the middle class, more Vietnamese families are capable of paying for high-quality education.|
The figures show that the demand for investments in universities is huge and the money private investors pour into the higher education sector is increasingly high.
Nguyen Hoang, for example, has suggested that investment of VND13 trillion to develop an international education city in Hai Phong. In August 2019, FLC group organized the groundbreaking ceremony to build FLC University in Ha Long City with the investment capital of VND4 trillion.
Meanwhile, in 2018, after gaining success with the general education system (Vinschool), Vingroup began developing VinUni, a brand for higher education.
Analysts said they can see bigger presence of large private groups in the education sector recently, which is attributed to loosened regulations. In the past, private investors mostly joined the higher education sector through M&As.
In 2018, a series of schools were transferred to private investors in 2018. Nguyen Hoang Group was one of the biggest buyers. Vietravel, a travel firm, unexpectedly stated it is holding 66 percent of shares of Kent International Junior College and officially joined the educational sector.
Nguyen Quoc Ky, CEO of Vietravel, said at the Vietnam Tourism Human Resources Forum 2019 that Vietravel invested in the school to prepare human resources for Vietravel.
As the higher education sector promises huge profit for investors, the value of M&A deals is high. Hutech JSC bought the University of Economics and Finance (UEF) at the price of over VND100 billion. Hung Hau Holdings bought Van Hien University at VND60 billion. It also owns Van Xuan Technology Junior College and Van Tuong School. Meanwhile, Vicostone, an artificial stone manufacturer, owns Thanh Tay University.
As Vietnamese are spending more money on their children’s education, higher education in Vietnam has proven to be a lucrative business.
Between 70 and 80 percent of the unemployed are junior college (3-year training) or university (4-5 year training) graduates.