Against a backdrop of a challenging environment, Callum Woodcock, founder of WineFi, a UK-based next gen investment platform, discusses why investing in fine wine is an attractive proposition.

Fine wine as an alternative investment offers effective diversification for an investment portfolio, Callum Woodcock, founder of WineFi, told this news service at a recent event hosted by Coterie Holdings in London.

It has shown strong performance against traditional asset classes with less volatility, and performs well in times of high inflation, acting as a hedge. “It is also largely exempt from capital gains tax in the UK and has outperformed the FTSE100 and S&P 500 on a risk-adjusted returns basis,” Woodcock said.

He highlighted how the asset class is growing in popularity and, despite a recent dip in the market, he believes the fundamentals are still strong. “Wine consumption is increasing, with new markets in India and Brazil,” he continued. “China is importing less than they did, but Japan is a big market, as well as Singapore, Hong Kong, Europe and the US,” he added.

The rising affluent middle class of Asia has boosted the sector. He also highlighted that they are seeing younger generations collecting and investing in wine.

Woodcock invests mainly in France – in traditional hotspots such as Bordeaux and Burgundy – as well as the Napa Valley in the US and Tuscany in Italy.

WineFi, which aims to provide cost-effective access to fine wine as an asset class, recently announced an investment from Coterie Holdings, a UK fine wine group which has grown rapidly since its launch in October 2023.  

Michael Saunders, CEO of Coterie Holdings, also sits on WineFi’s board of directors. Coterie owns merchants Lay & Wheeler and Hallgarten & Novum Wines, as well as a wine lending platform, Jera, and the fine wine storage facility, Coterie Vaults.

Since WineFi’s launch, Woodcock said they have remained in full hypergrowth, growing to 7+ figures in revenue within the first year. “We have developed a syndicate structure that allows investors to co-invest directly in diversified, expertly-curated portfolios of fine wine from as little as £3,000 ($3,900). The syndicate maintains day-to-day control of the assets through a voting system,” he added.

“Our process is to combine quantitative analysis (leveraging 18m+ data points across ~2000 producers) with the expertise of our experienced investment committee to select, source and manage portfolios of fine wine for our clients,” Woodcock continued. This committee is headed up by professional wine investor Peter Lunzer, who has invested £85 million on behalf of clients.

Woodcock also emphasised how the relationship with Coterie gives the firm and its investors access to preferential rates for storage, as well as brokerage channels which are off-limits to all but the largest merchants.

Gregory Swartberg, founder and CEO of London wine merchant Cru Wine, and Alexander Westgarth, CEO at wine investment firm WineCap, are also optimistic about the outlook for fine wine investment, seeing strong interest in the US and Asia.

As the investment climate becomes even more challenging, squeezing returns from traditional assets, WineCap believes that fine wine’s appeal as an effective portfolio diversifier will continue to grow. See more commentary here.

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Written by Amanda Cheesley