fifty two / alternativeinvestmentawardstwothousand&fourteen
Transforming Fine Wine Investing More and more wine connoisseurs are now realising the true value of their collections, says Nick Martin, founder of wineowners.com, the online platform for wine traders and collectors that’s changing the markets it serves
O
ver the past decade, managing a portfolio of assets online has become the norm for self-directed investors in equity markets.
As we all know, these self-service platforms allow private clients complete control of their portfolios; transparency of market pricing; trends and supporting information; and gives them direct access to global markets. Until last year, peer-to-peer fine wine trading was the preserve of professionals. As a consumer you couldn’t store buy and sell directly into the secondary wine market. Collectors had to go through traditional channels such as auction houses and brokers. Yet there’s an even higher proportion of self-directed wine collectors compared with mainstream asset classes. Why is that? Becoming interested in wine is generally passion-led. The journey very rarely starts with a cold interest in speculation. Yet as soon as the possibility of future appreciation comes into the purchasing equation so does the
role that wine can play in your life as a store of value. That’s how people who love wine become interested in its potential for future appreciation. So, if you’re interested in fine wine and enjoy consuming it, sharing it and learning about it, it’s a natural place to put a modest proportion of your total wealth. That’s why you might choose wine as supposed to any other pleasure or treasure asset such as watches, cars, art or anything tangibly similar. Because you love it and think you understand it relatively better than many other options available to you. That’s what Wine Owners sets out to do – to deliver the same degree of market access, transparency and control that high net worth consumers are familiar with in their other hobbies and asset classes. The essential starting point is being able to catalogue and value a collection online using portfolio management tools. Consumers lack the inventory management systems that trade participants take
for granted, and commonly lose track of exactly what they own and where it’s stored. Portfolio management gives collectors the tools to organise, track performance and take decisions about what they wish to drink, lay down, sell or acquire. Without the portfolio tools that serve the purpose of inventory management for private clients, it’s much harder to pursue the path of an active collector. For any self-directed private client price discovery is a precondition. There’s always been an abundance of pricing data online thanks to Wine-Searcher and Google, but making sense of it and finding a reliable market level price – the point at which a wine is likely to find a ready market requires analysis and a lot of data processing. For a market to thrive, participants must be protected by transparent and safe trading practices, which need to reflect the peculiarities of a market. Fine wine buyers must have the option to inspect condition, check provenance and be permitted to accept or reject matched offers to their