Portfolio Management

Fine Wine Portfolio Management is our core business. We are not a wine merchant with an investment division.

Our objective is to achieve long-term growth for our clients, in line with their investment objectives and risk tolerance.

Portfolio Management Account

Cult Wines flagship investment management service is our Portfolio Management Account, whereby the minimum initial capital investment is $45,000, fully customisable to your requirements.

 

Process

Our Fees

Models 02

 

Acquisition & Operations Fee

This gives you access to our investment research and strategies, advantageous pricing for all wines allocated and priority access to new releases. This fee also covers all the costs of transportation of wines including all delivery, insurance, administration, shipping and landing costs into the bonded warehouse.

The discounted fee will be applied either on the first transaction which takes the investor over the threshold, or on the initial capital as a whole if it is above the threshold for either tier 2 or tier 1.

 

Management Fee

The annual management fee covers on-going management, all trading on your account at 0% as well as your storage and insurance costs.

The management fee can be charged annually, quarterly or monthly and is calculated on each month end valuation of the asset value (gross asset value). 

To learn more, please download a copy of our Investing with Cult Wines brochure.

 

Investment Objective & Policy

Objective: Cult Wines’ investment objective is to achieve long-term capital appreciation through active management involving the buying, holding and selling of wines, whilst respecting the parameters set in our Investment Policy.

Investment Policy: Cult Wines exclusively invest in wines that respect our strict investing criteria and have potential for appreciation in value. We maintain a high level of diversification across regions, producers and vintages. Cult Wines applies a top down approach to define the optimal allocation (Strategic Allocation) in regions and vintages to the portfolio.

This is coupled with thorough quantitative analysis & research to select wines and producers that have the best relative value and growth prospects. Over the last 13 years we have developed proprietary statistical and probability models to identify those specific wines that deliver superior returns whilst respecting our strict risk parameters for investment. (Tactical Allocation).

The portfolio of wines is actively managed to maximise risk/reward and is rebalanced on a regular basis to maintain risk parameters, optimise allocation and meet your return objectives.

This process and framework is reviewed and validated by our Investment Committee.

Cult Wines’ Investment Committee combines the experience and expertise of the most senior members of the Management Team and the departments of Research, Buying & Trading. The Investment Committee is responsible for the Investment Policy: it defines the Investment Strategy and set the risk parameters. The investment committee meets quarterly to review the Investment Strategy and performance of our client portfolios and decides adjustments to allocation and specific underlying investments.

 

What does our Portfolio Management Service Include?

Process

Cult Wines flagship investment service is an end-to-end portfolio management service which covers all aspects of managing a collection of wine for capital appreciation.

Tailored Investment Strategy: Our team of portfolio managers will create a bespoke portfolio of wines tailored to your individual investment objectives, within the context of the investment policy set-out by the investment committee. Depending on your risk tolerance, target investment term and capital investment, we will build you a wine portfolio to meet your objectives. 

Storage: Investors’ wines will be stored at our brand-new storage facility in partnership with the London City Bond (LCB) network. Located in Melksham (Wiltshire), the 24,000 sq. ft. warehouse run by an independent third-party, will allow all private client reserves to be stored in isolation from other trading accounts.

Insurance: Cult Wines storage facility has a comprehensive insurance policy with Marsh to fully cover the contents of the warehouse against all risks of physical loss or damage. Details of which can be provided upon request.

Ownership: Our investors feel security at all times through title of ownership of the wines. All wines are placed in individual customer sub-accounts at the professional warehouse facility. Investors own individual cases and these are identified using sub-account codes. These codes identify the beneficial owner of the stock and ring-fence stock to protect against any third-party risks, including the unlikely instance that Cult Wines ceased trading. (Further info is included within the terms and conditions, SLA Appendix 1 – available upon request). All of the above information can be independently verified by London City Bond at any time by the client. Personal visits and inspection of stocks can be arranged at your convenience.

On-going Active Management: Our flagship investment service has eliminated the friction costs involved with trading wines on your account. By trading wines at 0% fees, this allows our team of portfolio managers to actively manage your investment enhancing your performance. This allows the portfolio manager to adjust your exposure and reduce risk, in line with the tactical allocation set out by the Investment Committee.

Online Management: Clients benefit from the ability to access and view their wine portfolio online or by mobile, tracking its growth whilst viewing live valuations and reading the latest market reports.

0% Liquidation Fees upon Exit: We will undertake the eventual liquidation of your assets when you decide to divest, not charging any fees for this service, ensuring you maximise the return on your investment.

 

Frequently Asked Questions

 

Will I have a dedicated portfolio manager?

Each of our portfolio management account clients is assigned their own dedicated portfolio manager who will manage your portfolio and thus be able to construct a tailored investment strategy. 

 

What level of contact can I expect from my portfolio manager?

We know how much our clients value maintaining open and transparent investor-manager relationships. Therefore, we keep all our clients regularly updated, at your discretion. We would recommend a regular review of your investment with your Portfolio Manager either quarterly, bi-annually or annually.

Our Portfolio Management Service is advisory or discretionary. You should discuss with your Portfolio Manager which option is best for you.

Clients also benefit from the ability to access and view their wine portfolio online. Through our online portal you can request a review, place a sale order or read the latest market reports.

 

What is the minimum investment?

The Minimum investment for uur Portfolio Management Service is $45,000. 

 

What wines will I be investing in?

Your dedicated portfolio manager will discuss your available investment level and will propose a portfolio comprised of wines designed to match your investment objectives. There are a number of regions investors can have exposure to. Whilst Bordeaux and Burgundy represent a significant proportion of the wine investment market, Cult Wines also trade in wines from Italy, Champagne, Rhone, Spain, U.S.A, Australia, Loire, Germany & Chile.

 

What Wines are likely to produce the best returns?

A key element in any portfolio which is being structured for investment purposes is diversification, the objective is to ensure wines are included with strong potential growth over the short, medium and long-term, whilst minimising position risk with a sufficient spread across estates, regions and vintages. Proposals will therefore typically reflect the strategic allocation as set out by the Investment Committee, customised by increasing exposure to certain sub-categories and regions depending on your own personal risk tolerance and return objectives. 

Whilst the outperformance of one particular region may suggest investing solely in that category, our aim is to provide our clients with the best risk-adjusted returns, and so we favour a diversified approach that limits an investor’s risk in achieving the best returns for their capital outlay., 

 

Is there a minimum period I must hold the wines for?

Generally, we advise clients to set a minimum 3-5 year horizon for their portfolios in order to benefit from a typical market cycle, with an optimum term of 5 years.

However, should you wish to sell your wines at any stage, we will liquidate stock upon request.

 

Who holds my wines? Where are they kept?

All our client wines are stored under-bond (exempt of UK duties and VAT, in an HMRC controlled warehouse) in a 24,000 square foot state of the art specialist wine storage facility operated by London City Bond (LCB) network, an independent third party, with full-coverage temperature and humidity control. The warehouse is located in Wiltshire, England which is around a 2-hour drive from Central London (1 hr 20 minutes by train). All assets are allocated to your Reserve Customer Code, logged with the warehouse and UK government, which can be independently verified with LCB. You will have online access to your storage records.

  • Dedicated warehouse staff offering speed of service for all customers.
  • Individual customer sub-accounts, providing greater security of asset ownership.
  • Full-coverage temperature and humidity control.
  • State of the art photographic studio available for all cases.
  • Additional authenticity checks using specialist equipment and training.
  • Comprehensive replacement-value insurance policy for all stock.
  • Protection against fire hazard.
  • 24/7, 365-days a year security.

 

Investing with Cult Wines

This essential brochure will take you through our investment process, fine wine investment merits, provenance and portfolio creation.