AlUla: Finance and Investment

finance and investment

Past and future returns

That’s an interesting phrase to hear from the lips of a senior figure in international finance – especially one who has a big job ahead raising funds for one of the biggest heritage, tourism and environmental projects happening in the world just now. The speaker is Eric Lalo, managing director and head of sovereign advisory at Rothschild and Co. For 30 years, he has been an expert on sovereign wealth funds and is now a central figure in financing the AlUla project. So, if numbers aren’t the main motivating factor, what is? “What’s crucial for the project at this stage,” he says, “is to make sure the project is respectful of the history and respectful of the environment.”

At AlUla, you have all the history – 7000 years of history. So this is what attracted me

Sir George Iacobescu – Executive Chairman of the Canary Wharf Group

In interviewing senior figures of finance, art, architecture, and infrastructure about the AlUla project in Saudi Arabia, you’re continually struck by how they see this as a pivotal moment in their careers and fields. For Eric Lalo, it’s an opportunity to see how serious his industry really is about ESG (Environmental, Social and Corporate Governance). The growth in investments described as ‘ESG’ is extraordinary – from $500 billion to $900 billion between 2020 and 2021. But as he says, that remains a small part of the $10 trillion whole. “Investors are not philanthropic institutions,” he says. “But they are super-mindful of their shareholders. And their shareholders have become very mindful of ESG and sustainability. AlUla is super-interesting because you now have an ESG preoccupation on both sides.” By ‘both sides’, he means the client – the Royal Commission for AlUla – and the advisors like himself charged with raising the capital to build the infrastructure and fund the hotels and other tourism elements.

That begins with the infrastructure and the initial $2 billion invested by the Royal Commission into the region's development. The money, says Sir George, “went first into creating an international airport, creating power plants, creating electric power and water plants.” A visitor to AlUla today can see the fruits of that investment: the airport, the Maraya Concert Hall, the Ashar resort. He or she will have an inkling of what’s to come: the tramway serving the site, the remarkable new Jean Nouvel hotel being carved out of the desert rock.

Jayne-Anne Gadiah

One of the UK’s leading women financiers explains her philosophy

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Why AlUla is seeking investors who have posterity as well as profit on their minds

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One woman’s journey

Jayne-Anne Gadiah is a leading figure in the UK retail banking sector. An accountant by training, she had a long association with Virgin Money (formerly Virgin Direct) as it was acquired and later sold on by the Royal Bank of Scotland (RBS). In the aftermath of the financial crash, she successfully piloted the takeover of Northern Rock. She was made a Dame in 2019 for her services to financial services and her commitment to advancing women within the industry. She is now the founder and executive chair of the fintech company, Snoop.

Eric Lalo

Rothschild and Co’s managing director and head of sovereign advisory on the distinctive appeal of AlUla to investors today

Watching our every move: how can humans coexist with the Arabian leopard?

The ‘journey through time’ concept that underpins the AlUla project applies just as much to the creators of the business plan as the designers of the visitor experience. The decisions they make today will shape AlUla for generations to come; and those decisions will unquestionably influence the public and private bodies around the world who have the epochal task of preserving our heritage and natural environment in the ESG era. In the tourism industry, we have seen perhaps too much focus on ‘the wow factor’. As the word ‘instagrammable’ has entered the language and become the favourite adjective of tourist boards and influencers, we’ve seen a rash of new buildings – hotels, bridges, civic spaces, ready-made ‘attractions’ – designed to be a nine-day social media wonder before the next ‘wow’ spot emerges. Those bridges that look like hands, glass walkways, man-made islands and giant picture frames have added to the fun and excitement of travel. But when you contrast them with the Nabatean cities of AlUla and Petra, you realise what the words ‘long term’ really mean.

At RBS, she’d seen what can go wrong when, to take Eric Lalo’s words, money is the only driver: “we blew the system up”. She’d also seen what happens when an organisation’s sense of duty towards its people and the people it serves is cordoned off in a small area called ‘charity’ or ‘corporate and social responsibility’. “I must have made the speech more impassioned than I thought because everyone was in tears. And we all agreed: we want to do something worthwhile, not just worth profits. We concluded we wanted to make everyone better off – and that includes customers, staff, the environment and our partners.”

Wherever there is a plan to reintroduce lost carnivores, you will find opposition. One county in the US state of New Mexico even built wolf-proof bus shelters to protect their children from the perceived threat of attack (even if the threat wolves pose to humans is really the subject of fairy stories rather than news articles). When a Scottish landowner floated the idea of bringing back wolves to the Highlands wilderness, the outrage from farmers and walking groups quickly persuaded him to retreat. That frustrates the rewilding campaigner and environmentalist Ben Goldsmith, who points out that “every continental Europe has its wolves back – including The Netherlands, Luxembourg and Belgium. We live perfectly happily alongside these charismatic species”. But whether it’s whale watching in the Pacific or monitoring tiger numbers in Nepal, we’ve also seen how the interaction between humans and nature can be turned into a force for good – and survival. “For someone like me, who began working in wildlife conservation 35 years ago, the future is a very promising one,” says Hani Tatwany. He sees the impetus coming as much from the people in a region with some of the world’s youngest populations, as from the government. “Eventually nature in Arabia will return to where it was before. And that will benefit humans, because without nature humans cannot function”.

Eventually nature in Arabia will return to where it was before. And that will benefit humans, because without nature humans cannot function

Hani Tatwany – CEO of the Arabian Leopard Fund

Why AlUla is seeking investors who have something more than a return on capital on their minds.

The numbers are not the key drivers

Eric Lalo – Managing Director and Head of Sovereign Advisory at Rothschild and Co.

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You sense that for individuals who are hugely experienced in raising those eye-watering sums of money, there really is something different about AlUla. Take Sir George Iacobescu, the financier who changed the London landscape when he helped raise Canary Wharf from the remains of the city’s once-thriving Docklands. Canary Wharf was an exercise in building and regeneration: one for which Sir George, a structural engineer by training, was especially well-suited. He sees AlUla as a different kind of challenge:

Jean Nouvel’s Sharaan hotel

Rock and stars: the Habitas resort

Glass and sky: the Maraya concert hall and conference centre

Sir George Iacobescu on the “kind, benevolent development” places like AlUla require

Almost every session I have with investors they ask about culture – how do you run the business? Let's see if you have a balanced team?

Jayne-Anne Gadiah – Founder and Executive Chair of the fintech company Snoop

The Old Town marketplace

This is not a gated resort, nor a fenced-off reserve. AlUla is designed to bring out the explorer in everyone.

An open secret

Tourism and hospitality

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Jean Nouvel

Habitas: AlUla al fresco

The new Banyan Tree resort in the Ashar Valley

How will AlUla balance development with the protection of its human and natural heritage?

Room to roam