Vinovest, a digital platform for investing in fine wines, has launched a fund for registered investment advisors, broker/dealers, family offices and institutional investors. Advisors and their clients can access fine wines through Vinovest’s flagship fund, an actively managed and diversified strategy for the Liv-X Fine Wine 1000 Index, or customized bespoke around time frames or ESG preferences. There are strategies.
Anthony Zhang, CEO and Co-Founder, Vinovest, said, “The fund offering aims to give professional investors – family offices, RIAs, brokers/dealers an opportunity to easily diversify into alcohol as an asset class for their clients ” Zhang was recently a guest on The Healthy Advisor podcast, sharing her story of how becoming a quadriplegic shaped her journey.
“When a manager is building your portfolio, they are looking for a mix of high-growth stocks, maybe some emerging market ones, but then the backbone of your portfolio is going to be in the more stable blue chips, for example. for,” Zhang added. “The same is the case with wine. You have very established sectors that can give you pretty predictable year-over-year growth with very little volatility and year-to-year variation. But then you also have emerging markets. A traditional Like a stock portfolio, we can build a portfolio full of your blue chip stable and emerging market portfolios, and then essentially assign risk to each. That’s how we do our rebalancing. If it goes below a certain score, we decide to sell it. When things are above a certain score, we want to buy it.”
Zhang said his company, which launched in 2020 with a direct-to-consumer offering, began offering some lump-sum funds to RIAs last quarter. They found that with rising inflation, many advisors were looking for a deflationary asset, such as fine wine.
“We did one where people wanted some amount to be cash-yielding each year, so we devised our strategy so that we could rebalance and sell X amount of our portfolio each year to give distribution to investors after a certain point. ” Zhang said. “Others were so strategically focused on certain areas that they believed they were more affected by climate change – hence more of the ESG strategy.”
But Vinovest is betting even bigger on the advisory market with its flagship fund. The fund, structured as a private placement, has a minimum investment of $50,000 for accredited investors. The management fee for the fund is currently just under 2%, but the fee will decrease as the fund gets bigger. They have raised more than $10 million in the fund so far, and Zhang expects to raise up to $100 million in the fund this year.
Vinovest has so far invested only 10 RIAs in the fund’s offering, but more advisors have been invested through the retail platform, where, instead of investing in an entity’s shares or membership interest, they directly invest in bottles and wines. invest in matters.
Vinovest uses a proprietary algorithm to select low-value wines based on type, region, historical pricing, risk-to-return ratio, and other factors. The company works with a group of bonded warehouses or custom-controlled warehouses to store alcohol in tax-free zones, so it can transact in a tax-efficient manner. Vinovest handles the custody and insurance of liquor through those warehouses. Their investment performance is in line with the Global Investment Performance Standards (GIPS).
Over the past few decades, Vine has delivered double-digit annual returns, outpacing global equities with volatility of about one-third, Zhang says.
Chip Romme, managing partner at Tiburon Strategic Advisors, which researches wine investments, said the investment pitch here is real.
“Wine has better returns than the stock market, and is great for diversifying,” he said.
Many companies that launch into the business-to-consumer or direct-to-consumer market eventually migrate to the wealth management market, Romay said, so he isn’t surprised to see Vinovest do the same.
Tiburon research shows that there are 20,944 wineries worldwide, up from 13,400 in 2010. Globally, wineries and grape growers generated $370 billion in revenue and $148 billion in net profit in 2019, up from $150 billion in revenue and $92 billion in profits in 1999. 2010.