Leading Wine Investment Cult Wines Moves to North America

Cult Wines, a world leader in wine investment, is expanding into the North American market. Headquarters in New York and Toronto opened today, allowing the company to aggressively pursue new US and Canadian customers.

With newly established North American roots, Cult Wines is one of the first wine investment platforms to play a role for the largely ignored North American wine investor.

“The United States is a big player in the auction and collector market, but historically it has been underserved in the wine investment market,” says Tom Gearing, CEO and co-founder of Cult Wines . “The idea and the concept of investing in wine never really took off as in Europe and Asia.

The New York office will be headed by Jonathan Stevenson, senior vice president of Cult Wines North America. The Canadian offices – a joint venture – will be headed by Atul Tiwari, a former CEO of Vanguard Canada.

The North American launch of Cult Wines coincides with the Bordeaux 2020 En Primeur, an exclusive event that gives investors a first glimpse of buying 2020 Bordeaux vintages before bottling.

“Traditionally, En Primeur has been more of a priority for European investors, but as we establish our Canadian and US presence, we expect to attract new investors and provide them with this unique opportunity to enter the European market. ‘investment in fine wines, “said Gearing. Cult Wines is one of the biggest buyers of Bordeaux En Primeur in the world.

London founders Tom and Phil Gearing launched the Cult Wines platform in 2007 to revolutionize how fine wine investing works and make the asset class more accessible.

Cult Wines now has $ 240 million in assets across three continents, now spanning North America. The company continues to expand its operations in London, Hong Kong, Singapore and Shanghai.

If you have $ 15,000 (or more) to spend, Cult Wines allows clients to invest in a global portfolio of fine wines, offering a variety of services ranging from condition reporting to active portfolio management.

The company’s $ 45,000 portfolios open this month in North America, with the entry level of $ 15,000 opening in July. The former offers a full portfolio management service, including priority access to new releases and En Primeur allocations, tailor-made proposals, 0% trading fees, and buy and sell advice.

While Cult Wines also has a strong presence in the UK, Europe and Asia, expanding into North America poses a new set of challenges. “From a purely wine investment perspective, brand awareness is much lower in North America,” Gearing said. “The structure of the North American wine market reflects this with the three tier alcohol system and complicated interstate laws. The resulting complexity and confusion may have stifled historical interest in investing in tax-free wine. “

The pandemic period has lowered many of these barriers, as the world of wine continues to go digital as drinkers move online.

“With the pandemic accelerating the digitization of wine (and in the broad sense of investments and alternative investments), he believes that these historic problems are less of an obstacle. Once the market has learned about how you can invest effectively and the benefits of doing so, there is undoubtedly latent demand. ”

The past few years have been the perfect breeding ground for wine technology and digital innovation, as the wine world has seen the introduction of a fleet of investment apps aimed at indoctrinating new investors. “Overall, a lot of exciting things have happened in the area of ​​alternatives in North America,” notes Gearing. “Until now, the space belonged to either auction houses or start-up platforms. Today, a lot of innovation and focus on platforms and products has made it easier for North Americans to invest and gain exposure to alternative assets. It is a natural extension of this that wine follows this trend.

The luxury class of fine wine investments has been particularly attractive during the pandemic period. Investing in wine allows investors to diversify a traditional investment portfolio and offers a low correlation with stocks.

That said, investing in fine wine has its own set of unique hurdles: brokerage fees, auction house commissions for authentication, cost of temperature-controlled cellars, and in-depth knowledge of wine and the monetary resources needed to navigate the resale market.

Cult Wines aims to break down these barriers, helping investors navigate the unique realm of investing in fine wines.

Over the past few years, we’ve seen a shift, with new avenues – apps like Vinovest and Rally and companies like Cult Wines – opening up and allowing consumers who don’t have the funds to build themselves up. cellar or knowledge to identify quality wines the ability to buy in the world of investment.

“From a product perspective, we see more innovation around technology. From a market perspective, we are seeing a significant widening of the appetite of global investors as well as a widening of the market for quality wines, ”said Gearing. “Perhaps ten years ago, the market was dominated by British and European investors, with a strong concentration in Bordeaux. Today, Asia plays an important role, alongside traditional markets and new emerging wine investment markets such as North America. The focus here is much more diverse, with fine wines across the spectrum finding favor with collectors and investors. “

“These factors are creating what seems like the right time to open our offices in New York and Toronto, to capitalize on this trend and to help raise awareness of wine as an asset class. “

About Michael Brafford

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