About Fine Wine Investment
Fine Wine investment is one of the longest standing alternative asset classes, showing a clear history of very attractive returns, with key drivers being:• An improving asset, where consumption creates an increasing natural supply-demand imbalance • Natural inflation protection (i.e. similarities with commodities but with more attractive dynamics) • Resilience from / low correlation with disruptive market events
The longest running index shows that across the last 30 years wine has delivered 11% compounded annual growth, which compares to 8% for UK Equities (including re-investment of dividends) and 4-5% for Gold and Oil.
There has been a steady market movement towards alternative asset classes over recent years. Wine is one of the most accessible and liquid of such alternative assets, with trading spreads now approaching those of traditional financial market-traded assets.
Unlike many other alternative assets, wine prices have limited correlation with economic cycles or disruptive market events – as a result, a strong argument can be made around the diversification benefit of wine being a component of a broader investment portfolio.
The Wine Market Today
The wine market has continued to show strong performance across regions over recent years, mainly fueled by:• Widespread strong demand globally, with positive dynamics not just in Asia but also in the more traditional markets of Europe and the US • The continuing significance of the High Net Worth stratum, also providing insulation from broader economic disruption • Non-Bordeaux regions fully established as “investment grade”, expanding the asset pool (to £25-30bn area)
BI and Wine Investment
BI is by a distance the merchant with the most experience in the wine investment space – for over 20 years we have helped clients with everything from building a drinking cellar with a responsible eye on future value, all the way through to operating multi-million pound portfolios in a full discretionary asset management context.
BI’s strength lies in its• Global reach: important for re-selling wine at investment exit; • Scale: able to source in quantity the most significant investment grade wines; • LiveTrade: our two-way online trading platform means that most investment grade wines can be purchased and subsequently sold instantly, in volume and at increasingly tighter spreads • Expertise: a number of ex-finance professionals focused entirely on the investment space
Today we are more active than ever, working with a range of institutions and high net worth individuals, enabling them to access wine investment via bespoke solutions – there is no “one size fits all” approach.
Please contact BI’s Investment Team today for further information. Our English and Chinese introductory brochures are below for reference.