Toddlers’ money now the target of investors

Trade wars and rising interest rates have taken away much of the shine of stocks and properties. If you, like many other Hong Kong investors, are thinking of selling out while the times are still good, you may want to know there’s a new game in town that has whetted the interest not only of local entrepreneurs but also millionaire investors on the Chinese mainland.

You don’t have to be an educator or a social analyst to notice the obsession of many parents in Hong Kong and on the mainland with giving their toddlers a head start. Many children as young as two years of age are drilled by their eager parents to prepare for examinations to qualify for admission to some of the most prestigious nurseries and kindergartens.

The strong demand has turned pre-school education into a big business, sucking up hundreds of millions of new investment funds from entrepreneurs, as well as investors who have grown wary of the stock and property markets.

As a result, some of the better known play schools and kindergartens have become prized take-over targets. Even the special schools, especially those that teach local pre-school children usage of the English language, are in demand.

Investors in pre-school education reportedly include young entrepreneurs who are interested in running the schools. There’s no shortage of passive investors who are interested only in the earnings potential of these facilities.

A mainland investor has reportedly bought a well-known kindergarten in Hong Kong because he can’t get over the fact that he couldn’t find a good kindergarten for his children when they were young.

In Hong Kong, all kindergartens are privately owned and operated although they have to register with the government and subject to regular inspections by the Education Bureau. Since the introduction of the “Quality Assurance Framework” in 2012, the government regularly publishes a set of “Performance Indicators” for public reference.

But, it’s word of mouth that determines the popularity of a kindergarten. The more famous one can charge a fee of up to several thousand dollars per student. That’s good business.

PROVIDED TO CHINA DAILY Early childhood education in Hong Kong has become big business, attracting more entrepreneurs and increased investment in the industry.