Money & Me: 'It takes a long time for people to be rewarded financially in the restaurant business'

Hashem Montasser, co-founder of The Lighthouse in Dubai and a former investment banker, believes that everybody should learn the fundamentals of finance and investing

Hashem Montasser is the co-founder of The Lighthouse, a restaurant/concept store in Dubai Design District. Courtesy The Lighthouse

Hashem Montasser is the co-founder of The Lighthouse, a restaurant/concept store in Dubai Design District. Originally from Egypt, the former investment banker is also the managing partner of Frontlane Capital, an investment firm that focuses on angel investing. He lives in Dubai with his wife, an assistant professor at NYU Abu Dhabi, their son, 9, and daughter, 4.

How did your upbringing shape your attitude towards money?

I'm Egyptian and grew up in Cairo. Both of my parents were professors at university and being in a German school, which was rather strict, I think I had a disciplined relationship with money. My parents didn't have a very high tolerance for frivolous or excessive spending. And I think I took that from them, as well as a zero-waste policy.

What was your first job and how much were you paid?

I graduated from Harvard University with a degree in economics and my first job was on Wall Street in New York with Merrill Lynch & Co, where I was accepted into their analyst programme. I believe my first salary was $50,000, which seemed like a huge amount of money per year. Living in New York for the first time, I had two other roommates and was able to cover my expenses.

How did you afford Harvard?

Harvard has something called need-blind admissions. In other words, if you're admitted, they commit to cover 100 per cent of your financial needs. But they admit you first before looking at your financials. So basically, they paid a good portion of my annual tuition, gave me a loan for a smaller part and then the rest was after-hours work. All of my roommates were on financial aid as well. That was my first experience of running my own budget and I made it a point to not ask my parents for anything from that day on. And I never did after that. So I really had to learn to be self-sufficient very quickly.

Why did you move to the UAE?

I moved to Dubai in 2005 to set up EFG Hermes’ asset management operations. The business grew very quickly to become the region’s largest asset manager with more than $8 billion under management. I was there for six years and really enjoyed it. They were very hectic, but extremely interesting times.

What inspired you to switch to F&B?

I wish it was going to be a eureka moment. I don't know if there was one. At the time, I thought I'm an art collector and I was starting to invest in early stage companies. And at EFG, I had built a business from scratch. I knew that I liked the idea of business building … [but] honestly didn't think of F&B. I thought more of wanting to build something again from scratch ... to build a brand. So we spent about a year really thinking very hard about the values that will drive The Lighthouse and govern that business. It's been a great three-and-a-half, almost four years now. But it was a very steep learning curve for us.

I really enjoy backing entrepreneurs because I feel I'm one. I know the journey, I know how hard it is and it's very satisfying to express your interest in entrepreneurship by doing it yourself, but also backing others that you believe in

What gave you the idea for the concept behind The Lighthouse?

The name comes from Virginia Woolf's [1927 novel] To the Lighthouse. My mother was an academic and she had done her PhD on Virginia Woolf. She was always telling me about a group called the Bloomsbury Group, which was a group of intellectuals and creatives, including Virginia Woolf, her sister Vanessa Bell and [economist John Maynard] Keynes and a bunch of others. They used to get together for meals and drinks and sort of brainstorming. I thought that was a great idea. The Lighthouse had that idea from the beginning, kind of being a beacon in a way. I felt why don't we create something that's unique? If you want to make it a hub and want [customers] to spend as much time as possible, they'll come, they enjoy a meal or a drink or a coffee, but then they can also browse the store. And that combination gave us that opportunity.

What is riskier: investment banking or F&B?

Definitely F&B. There is no doubt that banking pays better and there's less risk. I think F&B on the best of days is really risky and a very difficult business to operate. The margins are typically not that high. It takes a long time for people to be rewarded financially if you're in it. If you just want to make money, I don't know if that's the business for you. When we go every day and see people there eating, drinking, buying something and leaving with a smile, that for us has a lot of meaning. I'm filled with gratitude and it gives me a lot of meaning every day, waking up and knowing that I'm doing this.

What do you invest in as an angel investor?

Mostly in early stage tech-related companies, both in the region and abroad. Because of The Lighthouse, we come in contact with a lot of entrepreneurs every day and that has been an active channel for me in terms of investments. I don't only invest in companies in the region. Some of them are in the US or Europe, but I'm mostly focusing on tech. I really enjoy backing entrepreneurs because I feel I'm one. I know the journey, I know how hard it is and it's very satisfying to express your interest in entrepreneurship by doing it yourself, but also backing others that you believe in.

Hashem Montasser, co-founder of The Lighthouse and a former banker, believes that everybody should understand the fundamentals of investing. Courtesy The Lighthouse

How did Covid-19 impact The Lighthouse?

This has obviously been a very tough time. We have reopened, but like many others, we closed for a long period of time, five months, which was very tough on us and on the team. We were very lucky that we never defined The Lighthouse purely as a [restaurant]. So a lot of our other channels like retail … in fact accelerated. We have a very active online channel through our website and through our podcast. So that conversation really kept us in touch with a lot of our customers.

So you relied on technology to overcome the challenges?

We had done a lot of things pre-Covid that helped our business, but we accelerated it like many others. We embraced technology as a means to streamline our business – everything from our order management system, inventory management, HR, menus. Obviously, we do online delivery as well. A lot of that was accelerated during that closed period. So when we reopened, we were able to do it in a very kind of efficient and resilient way.

Are you a spender or a saver?

I would say I am more of a saver. I'm not an extravagant spender, but I'm impulsive. When I see something I really like, it’s very hard for me to resist. I'm an active and enthusiastic collector of contemporary Middle Eastern art, but what I learned to do is when I'm having that impulse, I call my wife first, which helps. I think the phone call either tempers me or reassures me one way or the other. I give myself a minute to breathe so I don't make a decision right there and then, which is usually not the best way to invest in anything.

What financial advice would you offer your younger self?

I think everyone should learn something about the fundamentals of finance and investing. Even if that's not your business. It's important to understand the differences between things like stocks and bonds and different savings mechanisms. But I would say the most important and easiest one is don't put all your eggs in one basket. Diversification is important.