How the gold rush failed to materialise for UK elites
It has become, in recent years, the Holy Grail for many of the country's biggest independent schools: set up overseas clones of themselves, sit back and watch the money roll in as super-rich sheikhs, oligarchs and princes buy in to the world-famous British independent school system.
Among the numerous independents to have established themselves in emerging markets are Dulwich College, Harrow and Sherborne, with Marlborough and Epsom colleges also considering operations abroad.
Many of the schools go into these overseas expansions using almost idealistic phraseology. For example, speaking at the time of its opening, the founding principal of Sherborne Qatar, Dr Colin Niven, told the press: "The common bond is a passion for education - the desire to turn out well-behaved, well-organised children who understand the values of decency, honour and integrity."
But now a report has poured cold water on the idea that all this country's most famous schools had to do was turn up and wait for the pupils to flood through the gates.
Management consultancy Parthenon's analysis concludes that just three of the 18 British branch campuses in emerging markets - which include China, south-east Asia and the Middle East - have met their first-year enrolment targets. Of the 15 that have fallen short, eight are under by 30 per cent or more.
"British schools are expanding abroad and many see it as a way of raising money," said Karan Khemka, a partner at Parthenon and the head of its Mumbai office.
But he added that things have not been going according to plan for a number of schools - many had made the mistake of assuming their name alone would trigger a flood of parents wanting to enrol their children. "These guys think they can fill a 1,500-2,000 place pretty damn quick. They don't understand the scale of the markets they're getting into," he said.
Mr Khemka believed that incorrectly estimating a school's enrolment potential could threaten the quality of education offered and damage the reputation of the parent institution.
"A lot of these schools are tied to a local property developer," he said, adding that schools which are less than full mean lower returns on capital, which could result in cost-cutting to meet shortfalls. "If you're not generating revenue for the developer they can force you to generate more cashflow by cutting operating costs.
"If (the schools) have not satisfied local investors, they may have to make a few compromises that they didn't think they would have to make and that could damage the brand."
Parthenon's report said that, of the nine branch campuses that are at least four years old, just four have reached a capacity of 70 per cent or above.
The consultancy estimated that the value of the current market is about #163;175 million and is growing at 15 per cent per annum. But it said too many schools relied on anecdotal data or reassurance from local investors that the market could support a new school setting up.
"British branch campuses have performed well relative to their local markets, growing faster than any other international school in their price band," Mr Khemka said. "What this means is that the schools have done well in terms of capturing what growth there is in the local market. The issue is that schools and local developers often have an exaggerated view of the local market potential."
He said India was one emerging market British schools should steer clear of. Of the country's 290 million school-age children, only 8,000 pupils - 6,000 of whom are the children of expat parents - were paying #163;6,000 a year or more for their education.
Mr Khemka said British schools would not be too different from India's home-grown private schools market, where fees often come in at just $1,500 a year.
"The Indian market is not very good. Premium international schools in India are not running at high utilisation, indicating oversupply in the market. (British schools) would do better in places like Vietnam and other parts of south-east Asia," Mr Khemka said.
He added that China continued to be a better bet, with Shanghai alone seeing 14,000 pupils paying at least #163;6,000 per annum for their education.
Parthenon's report concluded that independent schools thinking about setting up overseas should carry out more thorough background checks on the markets they are targeting, including looking at the catchment area and sizing up the competition.
"Many are simply overestimating the scale of the market," Mr Khemka said.
Dulwich College opened its first overseas school in Shanghai, China, back in 2003 - it now has about 1,400 pupils. Since then it has opened sites in Beijing and Suzhou, and an A-level school in Zhuhai in partnership with a local independent called Yung Wing.
Most of its pupils are from the US, the UK and Europe, with some from Hong Kong and Taiwan. Chinese nationals are not allowed to attend international schools.
Dulwich also has a school in Seoul, South Korea, and another is due to open in Singapore next September.
Ralph Mainard, who manages Dulwich's overseas operations, said the key is to start small and manage the schools locally.
Start-up schools have about 250 pupils and Dulwich uses a separate company in Shanghai to manage them.
"You have to be realistic. In the first year, a school will probably run at a loss," Mr Mainard said.