Lighthouse Canton Capital: Transforming the future of finance

Through its offices located in Singapore, Dubai and across India, the company has been providing intelligent investment solutions to its clientele

Global Investment Institution, Lighthouse Canton set up their Middle East operations here in Dubai in 2017 under the name Lighthouse Canton Capital (DIFC). Industry veteran Neil Cabral joined the firm last year as Managing Director and Head of Key Clients. Alongside the global leadership team, he has been successfully developing the firm’s footprint in the single-family office and key client segment and spearheads the firm’s strategic tie-ups and relationships across the Middle East.

With the UAE and DIFC actively seeking to strengthen its position as the leading financial hub for the Middle East, Africa and South Asia region, Cabral shares more on the initiatives Lighthouse Canton is fronting in terms of technology, investments, and bilateral relations. Khaleej Times spoke with Cabral to find out more on how Lighthouse Canton’s innovative investments are empowering the growth of the UAE-India relations which, coincidently also marks the celebration of the UAE’s year of the 50th and 75th anniversary of India’s independence respectively.

Excerpts from the interview:

Over the past year, we have seen the UAE launch several initiatives to strengthen its position as the leading financial hub in the Middle East, Africa, and South Asia region. Can you tell us more about Lighthouse Canton and how it is aligning itself with these activities?

The Lighthouse Canton group was founded in 2014 in Singapore. We provide our clients both wealth and asset management services. Over the years, the group has grown rapidly and we now have a global presence through our offices in Singapore, Dubai and several locations across India.

We have around 100 people across all our offices and oversee just north of $3 billion worth of assets under management and advisory across the group. In 2017, the firm established its presence in the region, setting up office in Dubai. Led by our Managing Director and CEO, Prashant Tandon, we work closely with several of the region’s single-family offices and institutions, with a healthy proportion of ultra-high net worth individuals and families.

Earlier in the year, we heard of the signing of a comprehensive economic partnership agreement (CEPA) between the UAE and India. While just a few weeks ago, we were made aware about the ministry’s Strategic Plan 2026 in line with the Dubai Strategy 2030 project to elevate Dubai into a global platform for knowledge-based, sustainable, and innovation-focused businesses. Here at Lighthouse Canton, there are three facets we have been actively engaging stakeholders in over the past year and a half. Specifically, in technology, investments and bilateral relations between the UAE, India, and Southeast Asia, particularly in the startup, private markets and life sciences industries.

The fintech sector is seeing a rapid expansion in the UAE. Tell us more about Lighthouse Canton’s focus on technology and what trends in the U/HNWI segment you are seeing?

Throughout the pandemic, one element that has kept the world moving has been technology. In combination with our investment acumen and human excellence, technology has been an enabler for us in our mission to elevate the client experience and provide intelligent investment solutions. Particularly in the U/HNWI segment, much of the technology in the financial sector has been aimed at mass market or retail clients and so, we are seeking to change that.

Investors are extremely becoming tech-savvy, with access to digital platforms and the internet, many can do all their investing online themselves. The U/HNWI segment is no different, and particularly with the next generation of clients, investment firms such as ours can no longer deliver just the regular brokerage model of buying and selling without adding value to their client experience.

Our team’s capabilities are in data-backed, well-researched investment guidance, aided by our robust institutional framework. Marrying that with technology, we have worked closely with our regional clients and partners to develop various systems and tools that help augment the digital user experience for this segment.

We are a firm believer that technology will transform the future of finance and the user experience for this segment. Our endorsement of that belief was recently validated as our company won not one but three awards at the coveted Global Private Banking Innovation Awards 2022. In the regional and country awards for Best Family Office, Lighthouse Canton was awarded the regional title for Middle East as well as the country title for the UAE. Under the digital innovation awards, we also clinched the title of ‘Outstanding Digital Transformation in Covid-19 by a Family Office’.

Innovation holds a strong place in the UAE’s vision for the future, and according to the annual Global Innovation Index 2019, the UAE maintains its top position as the most innovative country in the Arab world. How does this translate to the financial sector?

While technology is one aspect, the other two areas, which according to us, have strong implications on are investment acumen and human excellence. Be it in developing investment strategies and approaches to client portfolios, or finding the right people with the right mindset, innovation plays an important role. On the investment front, markets have been volatile and investors are either seeking ways to protect their investments or diversifying their holdings. So, innovative investments and empowering growth has been a key theme for our team this year.

On the wealth management side, we have been focusing on finding strategies with little correlation and have been basing our portfolios on covariance to help minimise drawdown. When market stress happens, correlation between asset classes becomes close to one. We saw this in 2000, again during the taper tantrum period and yet again during the pandemic.

To diversify portfolios for our clients, we must innovate and think out of the box. Instead of sticking to the 40 per cent equity, 40 per cent bond and 20 per cent cash ratio, we believe in breaking it down to each constituent of the portfolio and examining how one constituent correlates with the other, and not just the asset class. In times of market stress, this covariance, diversification and lack of correlation has helped our client’s portfolios generate alpha. The team also has been building its capabilities in actively managing hedge fund strategies as they exhibit strong resilience and fast recoveries during down markets.

While on the asset management side, alongside our public market funds, we have also been active in finding private market opportunities for our clients, particularly ones that drive economic and sustainable impact. With the signing of the CEPA, we expect increased two-way traffic. This includes Indian businesses setting up in the UAE and investors in the UAE looking to capitalise on India’s vibrant private equity and venture capital (VC) space. Already, a large portion of our AUM in private market strategies is booked through our DIFC business and we only see this increasing in the near future.

It is equally important that we find the right people to collaborate with on these approaches. For example, having relationship managers or investment consultants who can strike a balance between alignment with clients and adding value to their longer-term investments with us. This means taking the time to understand the client’s longer-term objectives and sourcing for investments that really make sense for their portfolios.

While in terms of the businesses we invest in, this means two things. Firstly, finding the right founders and entrepreneurs to work with and providing them the right skills, guidance, management discipline and structure. Secondly, providing them with the right form of support to build their personal and business legacies — from raising capital through to liquidity events and supporting their personal wealth and succession plans.

The Lighthouse Canton Founders’ Ecosystem initiative was launched for this very reason and we look forward to empowering the UAE’s startup ecosystem.

How else do you see the UAE and Middle East strengthening its position through further bilateral ties with other countries?

The CEPA, Strategic Plan 2026 and the reforms and initiatives announced last year by the UAE puts the nation on track in this vision for growth, creating employment opportunities and providing investors a complete array of financial products and services. A lot of the credit in this regard goes to its visionary leadership and I would like to specifically thank The UAE President, His Highness Sheikh Mohamed bin Zayed Al Nahyan, His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and Ruler of Dubai, and Sheikh Hamdan bin Mohammed bin Rashid Al Maktoum, Dubai Crown Prince and Chairman of The Executive Council of Dubai.

With both the UAE and India having just celebrated their key national milestones, i.e., the UAE Year of the Fiftieth (50th) and the 75th anniversary of India’s independence, we believe that there is much in store for the partnership between the two nations in the decades to come. The UAE’s vision is also in line with many Asian governments looking to promote entrepreneurship and the growth of their startup ecosystems. As such, we believe that there are strong synergies between the Middle East, Asia and South Asia. Both nations have come a long way and we owe a debt of gratitude in this regard to our representatives at the highest level. Specifically, I would like to thank His Excellency Sunjay Sudhir, India Ambassador to the UAE, and His Excellency Dr Aman Puri, Consul-General of India in Dubai and the Northern Emirates.

Two sectors which stand out to us are the startup and SME space, as well as the biotech, pharmaceutical and life sciences R&D sector.

In the recent years, the Middle East has been pivoting towards non-oil exports, with a strong focus on sustainability and technology industries. India and Southeast Asia are vibrant economies and have strong capabilities in these sectors. With macro tailwinds behind both India and Southeast Asia, startups and SMEs from both Asia and the Middle East can benefit both from an exchange of expertise as well as use these countries as strategic bases to expand into the relevant regions. Lighthouse Canton has strong expertise and on the ground networks in the startup and SME space in these localities given its investments in venture capital, private credit and more recently, venture debt. We have seen the pace of growth in these markets rise significantly and are committed to supporting bilateral ties by bringing capital, strategic insights, global relationships, and operational support to these growing companies.

Similarly, there are opportunities to be found in the biotech, pharmaceutical and life sciences R&D sector. Genome Valley in Hyderabad is emerging as a leading life sciences hub in Asia. With over 200 companies based in Genome Valley, and the government setting out key developmental goals for the cluster, there are many learnings that Dubai and the UAE can take away from the government of India’s success. Together with Ivanhoé Cambridge, a global real estate subsidiary of the Caisse de dépôt et placement du Québec (cdpq.com), and one of Canada’s leading institutional fund managers, we are co-invested in Neovantage Parks in Genome Valley — India’s largest privately-owned portfolio of leased life sciences R&D office labs. Given our strong ties here in Dubai, we look forward to facilitating bilateral relations and trade within this sector.