LC Ideas: Views & Insights
Lighthouse Canton’s alternative investment fund closes with a corpus of Rs 350 crores
New Delhi (Thursday, 30th November, 2023): Global investment institution Lighthouse Canton has announced the final closure of LC Nueva AIF, a scheme of Luminere Investment Trust, at Rs 350 crores. The LC Nueva AIF has seen huge interest from investors from various categories of investors including large single-family offices and institutional clients like SIDBI.
The Fund focuses on early-stage companies, typically contributing pre-Series A/Series A funding. It invests in startups with strong unit economics that have typically started generating revenue. The LC Nueva AIF adopts a sector-agnostic approach but with an inclination towards health-tech, consumer-tech, fintech, and education-tech businesses. It largely leaves out capital-intensive startups. The fund has a portfolio of around 30-35 companies.
Interestingly, the initial size of the Fund was set at Rs 300 crores, including the green shoe option. Later, the size of the fund had to be increased to Rs 350 crores to accommodate excess demand by family offices and institutional investors who wanted to participate in the Fund and be a part of the rapidly evolving startup growth story in India. After the USA and China, India is the third largest venture ecosystem globally and has become home to a sizeable number of unicorns.
“To date, India has produced more than 58,000 new businesses and the number is only growing. The robust growth in India’s startup ecosystem has been led by quite a few structural changes. Quite significantly, India has started outpacing China in some of the aspects related to start-ups, like the number of unicorns produced. India had 44 and 23 unicorns in 2021 and 2022 respectively as against 42 and 11 unicorns in China,” said Mr Sumegh Bhatia, Chief Executive Officer and Managing Director- India at Lighthouse Canton.
“The Fund has plans to deploy about half of the corpus in building the portfolio while the other half would be utilized for the follow-on rounds for these companies. The objective of this deployment strategy is to maximise alfa for our LPs and the most efficient possible use of capital raised. It also helps us maintain our equity share in subsequent rounds of capital raised by our portfolio companies and not get diluted,” said Mr Sohil Chand, Founding Partner and Chief Investment Officer, LC Nueva AIF.
In the last seven years, the AIF investments in India have seen a tenfold jump, with assets under administration at nearly Rs 7 lakh crores. About 80-90% of the funds raised today come from domestic investors. Present trends suggest that AIFs have the potential to grow into a substantial industry in the future, possibly approaching the size of India's Rs 46 lakh crore mutual fund industry (1).
Lighthouse Canton has been at the forefront of the venture investment domain in India in recent years. Lighthouse Canton has already partnered with Nueva Capital to launch its maiden venture capital fund, LC Nueva, focused on pre-series A and series A companies in India. The Fund was oversubscribed and successfully applied for an additional Rs 50 crores for regulatory approvals.
Headquartered in Singapore, Lighthouse Canton is a global investment institution with wealth and asset management capabilities. The firm has over 100 experienced professionals in Singapore, Dubai, and India, and it oversees over US$ 3billion worth of assets under management and advisory. Lighthouse Canton has a dedicated strategy to cater to the needs of startups and their founders. Lighthouse Canton's Founders' Ecosystem, as it is known, is the firm’s commitment to helping startups and their founders enhance performance and plan for their personal and business legacies at various stages in their lifecycles. The initiative provides Founders and startups added value through other venture investments, and business solutions as well as personal wealth management services These solutions range from funding solutions for companies across the capital structure to pre- and post-monetization funding needs of the founder. The firm also works closely with the founders and senior management on business structuring and personal wealth solutions.
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