Saudi Arabia to showcase futuristic megacity project at HK roadshow
Infini and Arte set up offices in Abu Dhabi amid deepening connection between China and region
The man in charge of a showpiece project of Saudi Arabia’s plan to diversify its economy away from oil will bring a roadshow to Hong Kong inviting investors to back the ambitious development.
Nadhmi Al-Nasr, CEO of Neom – a US$500 billion futuristic megacity under construction on the country’s northwestern coast – is set to host a half-day event on April 19 at the M+ in Hong Kong’s West Kowloon Cultural District.
Discover Neom, co-organised by the Belt and Road Office under the Commerce and Economic Development Bureau, will feature presentations by Neom’s leadership, a “New Future by Design Tour”, and a reception from 6pm to 9pm, according to an invitation obtained by the Post.
Neom’s team will visit the mainland first before coming to Hong Kong, which is the last stop for the roadshow, according to a source familiar with the matter.
During Chief Executive John Lee Ka-chiu’s February 2023 visit to Saudi Arabia, the delegation visited an exhibition of the mega project at which the city leader said Hong Kong could play a “pivotal role in channelling the funding” to the initiative.
Neom, a central pillar of Saudi Vision 2030, is likely to appeal to potential investors and partners from the city’s professional services sector, providing opportunities in areas such as IT, architecture, accounting and law.
“The construction of Neom is of great significance,” said Tse Yung-hoi, vice-president of the Chinese General Chamber of Commerce (CGCC) in Hong Kong, who confirmed the CGCC had been invited to the roadshow.
“The Middle East’s move towards diversifying its business and economy is creating boundless opportunities for us,” he said.
“Hong Kong’s international financial industry, professional services, together with the technology and innovation sector, will play an irreplaceable role in the economic transformation of Middle Eastern countries.”
The Chinese Manufacturers’ Association of Hong Kong, the Law Society and the Federation of Hong Kong Industries have also received Neom’s invitation, according to separate sources with knowledge of the matter.
Attendees at the April 19 roadshow can learn of Neom’s approach to urban design, integrated economy and “future living” in a “nature first”, zero-carbon environment and experience its diverse regions through immersive exhibitions, according to the invitation. Guests could also connect with the Neom leadership team and “explore significant partnership and investment opportunities that Neom has to offer”, it said.
Another Neom-related talk, organised by the Hong Kong government, will take place at M+ the following day with the theme of “Future City Development – Green and Digital”.
Francis Fong Po-kiu, honorary president of the Hong Kong Information Technology Federation, said the group had passed on the event invitation to its members.
The project’s name is a portmanteau, formed from the ancient Greek prefix “neo” meaning “new” and the letter “M”, which is the first letter of Crown Prince Mohammed bin Salman’s name, as well as the first letter of the Arabic word for “future”.
The project is so far said to be predominantly backed by Western investors. Neom calls itself a “mindset” and promises to be a zero-carbon urban centre powered entirely by renewable energy.
Its chief investment officer Manar Al-Moneef was in Hong Kong on March 26, speaking at the One Earth Summit.
“When it comes to investment, companies will look into the initiative’s future development and whether it can make a fortune,” said Jeffrey Lam Kin-fung, the commerce sector lawmaker who led a business trip to the Middle East last year.
Hong Kong-based fund managers are expanding to the Middle East to take advantage of new investment and fundraising opportunities, as well as the region’s talent pool, amid increased global headwinds and US-China geopolitical tensions.
As the relationship between China and the Middle East deepens, fund managers in Hong Kong have a unique role in connecting the two regions, according to industry participants, who are increasingly seeing the value of setting up a base in Middle East financial centres.
In a survey conducted by the Hong Kong Investment Funds Association in November and December, more than 50 per cent of fund managers saw opportunities in Dubai (57 per cent), Saudi Arabia (57 per cent) and Abu Dhabi (52 per cent).
Last month, Hong Kong-based hedge fund Infini Capital Management opened an Abu Dhabi office after receiving approval from the Middle Eastern city’s Financial Services Regulatory Authority (FSRA), according to the company. This would set the stage for the firm to become the first Asian hedge fund manager in the Abu Dhabi Global Market, an international financial centre and free zone, it said.
“There is obviously a lot of coverage about deepening investments between Greater China and the Middle East, and we are watching these closely to leverage our expertise in both markets,” said Tony Chin, Infini’s founder, CEO and chief investment officer.
For example, dual-listed companies in Hong Kong and the Middle East could potentially present relative value and eventdriven investment opportunities, he said.
Last September, the Hong Kong bourse added the Saudi Exchange as a recognised stock exchange, making its equities investible for local funds and retail investors.
Infini is also eyeing new listing, stock and bond activities in the Gulf Cooperation Council (GCC), which comprises Saudi Arabia, Kuwait, the United Arab Emirates (UAE), Qatar, Bahrain and Oman.
The hedge fund manager is raising US$1 billion to tap the latest opportunities and expects the headcount in Abu Dhabi to exceed 10 in the next 12 months.
Hong Kong-headquartered asset manager Arte Capital shares Chin’s positive sentiment. The firm established an office last year in the Al Khatem Tower, the same building as Infini.
Last November, Arte received permission from the FSRA to conduct regulated activities.
“We see a unique opportunity in the strengthened relationship between China and the Middle Eastern countries,” Arte founder and chairman Ethan Chan said. “Asset managers like us are in an excellent position to connect the resources, companies and capital between the two regions.”
In November, Arte launched a US$1 billion fund for Chinese firms expanding to the Middle East with the endorsement of the a government agency. The capital for the Arte China-Arab Strategic Fund came from Abu Dhabi and China, Chan said.
The investment office said at the time non-oil bilateral trade between the UAE and China grew by 18 per cent to US$72 billion in 2022.
“We are gathering some very high-quality portfolio companies in new energy, new materials, media and new-energy vehicles,” Chan said, adding his firm planned to deploy around US$500 million over the short term and secure co-investors such as sovereign wealth funds and family offices to match the fund’s commitment in each deal.
Muneer Khan, a partner and Middle East regional head at law firm Simmons & Simmons, said the Middle East, especially the GCC, had accumulated enormous wealth from oil and gas, which had trickled down to the economies and helped generate more private wealth.
“There’s a lot of wealth generated in the Middle East at both the sovereign and institutional level and the private level, such as family offices, which will benefit hedge fund managers when raising capital,” he said.
“We’ve seen a huge increase in asset managers from the US, Europe and Asia flying in on marketing visits and trying to raise funds here.”
The extra fundraising channel can be helpful to Hong Kong- and mainland-based fund managers.
“When things are difficult in your market to raise capital, it can force you to look elsewhere,” Khan said.
Another factor affecting fund managers’ expansion to the Middle East is talent.
Khan said there had been a war for talent among portfolio managers as the multi-strategy, multi-manager platforms had been growing rapidly on a global basis.
“The location further opens new talent pools, particularly from Europe, with a lot of good talent in London and Paris willing to relocate to Abu Dhabi,” Infini’s Chin said.
A low-tax environment, affordable cost of living and accessible visa schemes were some incentives, Khan said.
High-earners such as portfolio and hedge fund managers were concerned about increased taxation, but the UAE had no personal income tax and exempted corporate tax for regulated investment managers, he said.
However, there are challenges even amid the friendly relationship between the two regions.
“Global headwinds and the US-China tensions have affected [the Middle Eastern investors’] interests in China,” Arte’s Chan said.