Brexit has lenders scrambling to secure placement for children of their relocated staff
This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (January 8, 2018).
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For months the Frankfurt International School has been fielding phone calls from some of the world's biggest banks trying to enroll the children of their top earners.
The lenders -- under pressure to relocate staff to Frankfurt in the wake of the U.K.'s vote to leave the European Union -- are counting on the English-language day school to expand its roughly 1,800-student enrollment, but headmaster Paul Fochtman is playing hardball.
"We will not get distracted by Brexit," he said. "We are happy with our current size."
Banks are still in the early stages of selecting staff to relocate to the Continent as Brexit negotiations lumber toward a March 2019 deadline. But their hunt for elite private schools already has begun.
Admission for the 2018-2019 academic year is under way, and the finance industry wants the finest education money can buy in Europe. Bankers also want it in their lingua franca, English.
Goldman Sachs Group Inc. has paid extra fees to secure 80 seats for the children of staff at schools across Frankfurt, according to a person familiar with the matter. HSBC Holdings PLC is angling for first-mover advantage in Paris, where the British bank is in talks with several top schools, according to people familiar with the matter.
School administrators say some banks are paying full tuition upfront, before staff and their families have even decided to move.
That doesn't mean schools in cities like Frankfurt, the German financial capital drawing the bulk of the Brexit exodus, are rolling out the welcome mat. Schools across Europe are reluctant to bend admissions rules to accommodate bankers' children. Many don't want to invest in enlarging enrollment, citing uncertainty over the outcome of Brexit negotiations.
"If banks aren't in contact with our school right now, they are going to experience difficulties for fall 2018 entrance," Mr. Fochtman said.
The risk of a schooling shortage has banks in a bind. The U.K. could lose 30,000 finance sector jobs as a result of Brexit to cities such as Frankfurt and Amsterdam, according to Brussels-based think tank Bruegel. Those midsize cities, however, lack the array of schooling options that many bankers have come to expect from London.
Deutsche Bank AG Chief Executive John Cryan told a conference in Frankfurt in September that the bank's hometown was lagging behind London in its offering of schools and other services. The Frankfurt-based lender has about 8,000 employees in the U.K.
"This is where Germany needs to catch up if it wants to take over a large share of the business performed in London," Mr. Cryan said at a conference in the German city.
Eric Menges, head of FrankfurtRheinMain GmbH, a government-backed agency that promotes Frankfurt, said the city's private schools will build extra capacity if they get assurances the inflow of Brexit-related children is significant. Right now, he said, the city's international schools have enough room to accommodate the early arrivals.
Frankfurt International's Mr. Fochtman said lenders approaching the school now about Brexit-related students are already tardy. Every year, the school sets aside 10% of its 350-500 available seats for companies that pay a special "partnership" fee to the school. But vacancies under that program have already been filled for the next academic year, he said.
Seven miles south, the Metropolitan School Frankfurt, a modern, bright yellow building in a quiet, middle-class district, has blocked seats for banks that have agreed to pay tuition of up to 14,300 euros ($16,854) for the academic year, said Peter Ferres, a former investment banker who founded the school in 2007.
The International School of Amsterdam, founded in 1964 by a local director of International Business Machines Corp., also has received many inquiries from financial institutions, said school director Edward Greene. But Mr. Greene isn't keen on partnering with companies.
"We're not convinced it's the right way forward," said Mr. Greene. "If we offer 45 seats, they aren't available to others," he said.
In Paris, which boasts a wide selection of international schools, HSBC has fanned out, entering talks with several schools, according to people familiar with the matter.
One is the exclusive International School of Paris, located a stone's throw from the Eiffel Tower. The school, which currently has 700 students from kindergarten to high school, plans to open a third campus next year to accommodate another 300 children.
But Brexit-related students aren't getting special treatment. They need to submit school records, recommendation letters and a EUR900 nonrefundable application fee. Then there is tuition of up to EUR31,600 a year, depending on the child's age, as well as a EUR9,000 entry fee.
"We will have capacity to meet higher demand," said headmaster Simon Murray. "But they will still need to go through our admission process," he said.
Max Colchester and Margot Patrick in London contributed to this article.
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(END) Dow Jones Newswires
January 08, 2018 02:47 ET (07:47 GMT)