What is Cult Wines and how does it work?
Cult Wines is an organization that specializes in the acquisition and management of premium wine collections for investment purposes. Established in 2007, the company has developed expertise in curating portfolios of fine wines for investors, underpinned by robust investment strategies and data-driven technology.
The company's services encompass a comprehensive approach to fine wine investment, including the development of personalized wine portfolios, wine collection management, and storage solutions within a secure bonded warehouse located in Melksham, UK. Additionally, they offer valuation services for private cellars and in-bond fine wines, as well as procurement of rare wines that may be difficult to access.
The process of investing with Cult Wine Investment involves several steps. Initially, investors determine the amount they wish to invest, with a minimum threshold for access to a dedicated portfolio manager and exclusive company events. Investors set their investment goals, risk tolerance, and the desired term for their investment, which allows Cult Wine Investment to construct a portfolio tailored to these specifications. Once funding is provided by the investor, the selected wines are allocated to their name and stored in the company's bonded facility.
Cult Wine Investment operates differently from a wine investment fund. Instead of pooling money to buy wines collectively managed by a fund, Cult Wine Investment allows clients to own individual bottles and cases. These assets are stored in bonded warehouses on behalf of the clients and remain their property until they decide to take physical delivery. This model not only aims at the appreciation of the wine's value over time but also provides clients with unique experiences related to wine investment, such as exclusive tastings and vineyard visits.
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How risky is Cult Wines?
3/5— Moderate Risk
Investing in fine wines carries risks inherent to the market, including fluctuations in wine prices, changes in consumer demand, and broader economic variables that can affect the value of the assets.
Additionally, the liquidity of fine wine can be variable, and while Cult Wine Investment facilitates sales, there are no guaranteed timeframes for selling wine or assured prices. As with any investment, there's the potential for financial loss, and investors should carefully consider these risks.
How liquid is Cult Wines?
1/5— Minimum Liquidity
Cult Wine Investment provides an avenue for investors to sell their wines through its specialist trade and wholesale team, who can facilitate sales to the global wine trade, private collectors, and consumers.
The typical timeframe to liquidate a wine investment portfolio is between 8 to 12 weeks. However, this period can vary and may be longer for larger or more unique portfolios.
How volatile is Cult Wines?
3/5— Moderate Volatility
Fine wine as an asset class typically exhibits lower volatility compared to traditional financial markets; however, it is not immune to price fluctuations. These can be influenced by factors such as vintage quality, brand reputation, global economic trends, and changes in consumer preferences.
While fine wine has the potential for steady appreciation over time, investors should be aware that values can fluctuate and might not always align with broader market movements.
What is the average rate of return for Cult Wines?
8 %— Moderate Return
Cult Wine Investment has demonstrated resilience and returns in the past, with a compound annual growth rate of 8% since its inception in 2009.
What is the minimum investment amount for Cult Wines?
The minimum investment amount at Cult Wine Investment starts at $35,000 for the Premier Cru tier.
Different investment tiers are available, including Grand Cru with a minimum investment of $150,000, Cult Cru starting at $700,000, and the Black Tier which requires a minimum investment of $1,500,000.
All tiers provide a range of services, such as the creation of a portfolio based on the investor's risk appetite and investment horizon, full storage and insurance of the wine, zero fees on buying and selling transactions, and access to live prices/values through a client portal. Investors also receive an annual portfolio review with a Relationship Manager, early access to offers and new releases, as well as opportunities to attend wine tastings, events, and organized trips.
What is the investment time horizon for Cult Wines?
Cult Wine Investment recommends fine wine as a medium to long-term investment, with a suggested minimum horizon of 3-5 years to capitalize on a typical market cycle, and an optimal investment term ranging from 5-10 years.
Who can invest in Cult Wines?
Cult Wine Investment is open to any individual interested in investing, without specific geographic or residency restrictions.
You must be at least 18 years old or the legal drinking age in your country of residence to access the services.
Is Cult Wines regulated or audited?
Wine investment is not regulated by the Financial Conduct Authority or the Securities Commission, which means it operates outside the purview of traditional financial services regulations.
Investments in wine and other similar alternative assets are therefore subject to different oversight mechanisms compared to standard securities.
Is Cult Wines insured?
Cult Wine Investment ensures that the tangible assets purchased by investors are protected through comprehensive insurance coverage.
Wines are stored in their own London City Bond warehouse near London, where they are secured and maintained in optimal conditions for preservation of quality. In the unlikely event of physical loss or damage, the insurance policy in place fully covers the investment.
Does Cult Wines distribute payouts?
No Recurring Payouts
Cult Wine Investment does not provide dividends to investors, as the returns are generated from the appreciation in value of the wine itself rather than periodic income distributions.
What are the annual fees for Cult Wines?
Cult Wine Investment has a tiered fee structure for managing wine portfolios, with an annual fee that varies by investment level:
- Premier Cru tier starts at $35,000 with a 2.75% annual fee.
- Grand Cru tier starts at $150,000 with a 2.50% annual fee.
- Cult Cru tier starts at $700,000 with a 2.25% annual fee.
- Black Tier starts at $1,500,00 with a 2% annual fee.
The annual fee is broken down into monthly charges, calculated as a portion of the portfolio's value at the end of each month, providing investors with a more manageable payment schedule instead of a single lump sum payment annually.
How do I handle my investments in Cult Wines?
Cult Wine Investment clients can actively manage their wine portfolios by adding wines, reinvesting funds, or liquidating assets.
For Cru Classe clients, this involves selecting wines through the Exclusive Offers section or contacting support to add or sell wines. Premier Cru clients and above have a dedicated Relationship Manager to assist with transactions. The process to sell stock can take 6-8 weeks.
The current value of a portfolio can be viewed by logging into the investor portal, where detailed performance information is also available.
Purchasing wine depends on its availability and demand, with most transactions handled promptly, followed by an invoice once the portfolio is updated.
How does Cult Wines get taxed?
Cult Wine Investment provides tax document support by supplying necessary documentation for trading activities or account statements upon request.
Investors can contact support or their dedicated Relationship Manager, if they are Premier Cru tier or above, for these documents.
For UK-based investors, fine wine stored in government bonded warehouses is exempt from duty or VAT and typically qualifies as a "Wasting Chattel," which is generally exempt from Capital Gains Tax but subject to Inheritance Tax.
How many investors are on Cult Wines?
No data available on Cult Wines' user count.
The company manages assets valued at approximately $353 million. It's global network encompasses clients from 83 countries, indicating a diverse and international clientele.
Furthermore, Cult Wine Investment is responsible for the care of over 1,250,000 bottles of wine, which are stored within the United Kingdom.
Who is the CEO of Cult Wines?
Tom Gearing is the Co-founder and CEO of Cult Wine Investment. He is responsible for the company's strategic direction, global operations, and technological advancements, which have positioned Cult Wines as a distinguished entity within the industry. Under his leadership, the company has evolved from a start-up to a global enterprise with over £265 million in assets under management and a workforce exceeding 100 employees across various international offices.
Philip Gearing is the Co-founder and Chairman of Cult Wines. He combines his deep knowledge of fine wines with extensive experience in financial markets to contribute to the company's success. Prior to his involvement with Cult Wines, Philip established a specialist Burgundy merchant and co-founded Financial Wines, a digital platform that facilitated price transparency in the fine wine trade. His background also includes over two decades in investment banking with prestigious firms.