Q&A with Alan Vallance

The RIBA’s sale of its majority stake in NBS saw its seal (briefly) leave London for the first time in its history. Chief executive Alan Vallance explains what the £31.75 million it has gained will mean for the institute and its members, and describes a positive future relationship with its subsidiary

Alan Vallance, CEO, Royal Institute of British Architects.
Alan Vallance, CEO, Royal Institute of British Architects.

What is the deal the RIBA has done?

We’ve gone into partnership with LDC, the private equity company of Lloyds Bank, to get external investment into what was RIBA Enterprises and is now called NBS. We’ve done that by selling some of our equity.

Why was the deal needed?

Its prime purpose was to find a way to invest in RIBA Enterprises. The way it was constructed within a charity was fine, but it could only achieve its potential as a global player by getting investment. A secondary consideration was about the RIBA’s own financial position.

You’ve been doing this for some time?

It’s been going on for 15 months and has involved seven council meetings. It is the biggest financial decision in 184 years. We did a lot of work to give the council the evidence it needed, as ultimately it was their decision.

What will the RIBA do with the investment?

LDC has invested £31.75 million. That will be spent by the NBS to deliver a plan it is developing. There are huge opportunities in the US, Canada, Australia and to invest in technology. I would expect it to think about acquisition too. Whatever it does, we will sit at the table with LDC. I am  on the board as a RIBA representative. We also  intend to retire some or all the RIBA’s debts. For the first time in at least five years we are in a position to think about investment for members’ benefit too. We have aspirations to grow internationally and in the regions. Ben Derbyshire spoke about the federal model when he became president. We can make inroads on that. I am also keen to do more to digitise our offer.

Will the RIBA have a controlling stake in the NBS?

We have a significant minority stake, as does LDC. But we have retained some rights to say yes and no to things – for example, an agreement to protect the RIBA brand. The remaining stake is now owned by the management.

How does the RIBA plan to replace the income it received from RIBA Enterprises?

RIBA Enterprises provided nearly £5 million of Gift Aid money to the RIBA every year. The money from the equity sale will insulate us for several years, and our detailed business planning process starts imminently. We will still get NBS dividends, subject to tax, if awarded.

So the deal doesn’t mean there will be a discount on membership fees?

The board was due to discuss subscriptions last month but as a voluntary membership body the RIBA must deliver value. If we carry on as we now are, we ‘ll be fine for 40 years. We were never forced to sell anything, but were mindful that without alterations things might get tough.