22 September 2014 Media & Impact Investing Investing in Education What are your kids up to? Education: an underinvested space USD4.6trn is spent every year on education globally, second only to healthcare, and more than defence and R&D combined. Most of the money goes into salaries, making education an underinvested space. The global investable market cap is USD70bn, versus USD4.0trn in healthcare and USD370bn in defence. We explain why a U-turn may be near. Pressure to improve efficiency of spending In this report, we show how an unaffordable system is forcing governments to experiment with new solutions to do more with less. The US market is the world’s largest, and its educators are increasingly committed to delivering better outcomes at more reasonable prices. This is opening up new pockets of growth. Invest in solutions allowing for cost-effective education Technology is the enabler of this long-term transformation. A flurry of new services has come to the market from established companies such as Pearson (rating upgraded from Reduce to Buy), as well as newcomers. We provide investors with a roadmap to navigate their way through the changes and spot the best-positioned investments. Research team Andrea Beneventi (Media)
[email protected] +33 1 7081 5752 Samuel Mary (ESG)
[email protected] +44 20 7621 5190 Inigo Egusquiza (Prisa)
[email protected] +34 914 36 5112 IMPORTANT. Please refer to the last page of this report for keplercheuvreux.com “Important disclosures” and analyst certification(s) Media & ESG research Contents Acknowledgments ............................................... 5 Executive summary ............................................. 6 Education market size at a glance .................