The Lay & Wheeler Collection II is the second iteration of the fine wine investment syndicate built on the partnership between WineFi, Lay & Wheeler, and Coterie Holdings. It follows the inaugural Lay & Wheeler Collection, which has delivered 23.26% since inception and has already begun returning capital to members through early exits.

Our recent webinar detailed the strategy and launch of The Lay & Wheeler Collection II. Callum Woodcock, CEO at WineFi, joined Dominic Walker from Lay & Wheeler, WineFi's Head of Data and Analytics, Aaron Ameli-Daniel, and Head of Investment, Matthew Small, to host a webinar presenting the new investment portfolio.

This exciting partnership brings together Lay & Wheeler's 170-year history as a renowned fine wine merchant with WineFi's innovative, data-driven investment expertise. Together, the syndicate offers investors diversified exposure to an expertly curated portfolio of fine wine, with an accessible minimum entry of £3,000.

Why Invest in Fine Wine?

The panel opened by outlining the core characteristics that make fine wine such a compelling alternative asset class. As wine ages, its quality improves and demand naturally increases. Simultaneously, the overall supply decreases due to consumption and damage, steadily driving up prices over time.

Beyond supply and demand, fine wine exhibits a low rolling correlation coefficient with traditional asset classes like fixed income and gold, offering excellent portfolio diversification. For UK investors, fine wine is also generally exempt from Capital Gains Tax (CGT), as HMRC classifies it as a wasting asset with a useful life of under 50 years.

Fine Wine Market Update

The fine wine market experienced a significant boom during the pandemic, with Champagne increasing by 50% and Burgundy by 60% over a 14-month period on the Liv-ex 1000 index. Following a subsequent 36-month correction triggered by rising interest rates and increased merchant supply, prices are now actively stabilising.

Over the last four quarters, buyers have steadily returned to the market to take advantage of these corrected prices. Our proprietary WineFi trade price index indicates a strong increase in demand for auction trades, particularly within the premium price segment and for wines with age. Furthermore, the Liv-ex bid-offer ratio is improving across nearly all indices, serving as a highly positive leading indicator for future price growth.

About The Lay & Wheeler Collection

Following the success of the first Lay & Wheeler collection, the second iteration offers a truly globally diversified approach. The new portfolio strategy involves increasing our exposure to Spanish wines from 5% to 10%, whilst reducing our Bordeaux exposure down to 5%.

This shift is backed by our bespoke WineFi Spanish index, which has risen 50% since mid-2021. It has demonstrated immense resilience, boasting a maximum drawdown of just 3% compared to Bordeaux's 18% drop. Key Spanish producers targeted for this collection include blue-chip names like Vega Sicilia, Domingo de Pingus, and Lopez de Heredia. The portfolio also maintains strong allocations in Burgundy, Champagne, and Italy, whilst adjusting exposure in the premium price bracket to capture the current market upside.

How WineFi Uses Data to Select Wines to Invest In

Aaron detailed the immense importance of targeted asset selection, noting that careful selection is crucial for strong returns. For example, even within a highly traded blue-chip producer like Domaine de la Romanée-Conti (DRC), top-performing wines yielded 60% returns over five years, whereas the bottom half returned just 9%.

To navigate this, WineFi utilises a proprietary WineFi Investment Score (WIS) model to filter approximately 40,000 wines down to the most promising 10,000. This probability model rigorously evaluates 38 unique predictive variables using over 40 million historic price points and three million critic scores. We rely on key metrics like price-per-point and our True Price proprietary valuations model to identify distressed sellers and undervalued assets, historically generating an average gross alpha of 7% against the Liv-ex benchmark.

Q&A Session

The webinar concluded with an informative Q&A regarding the syndicate's structure. We confirmed that the wines will be held safely at Coterie Vaults, a UK government-bonded warehouse situated just outside Ipswich. Syndicate members will maintain direct legal ownership of the underlying wines through a UK bare trust nominee structure, ensuring all CGT benefits carry through directly to the end investor.

We also clarified that any exit recommendations made by WineFi or Lay & Wheeler must be strictly approved by a syndicate investor vote. Finally, the fee structure includes a maximum 12.5% one-off fee, which fully covers storage, insurance, and all brokerage costs over the anticipated five-year holding period. WineFi takes absolutely no margin on the wines purchased, directly passing on below-market discounts to our syndicate members.