Tag: Wine Investment

Olivier Staub is the Chief Investment Officer (CIO) of Cult Wine Investment. He has previously held senior trading and portfolio management positions at international financial institutions including JP Morgan, Barclays Capital, BBVA, and London Clearing House.

I recently interviewed Olivier to learn more about the inner workings of Cult Wine Investment and their Investment Management Team.

Liz:

It’s wonderful speaking with you today, Olivier. Why don’t you introduce yourself to my readers and tell us how you got into working with Cult Wine Investment.

Olivier:

I’ve been involved in finance for over 25 years and have held various positions across the world at international firms like JP Morgan, Bear Stearns, and Barclays Capital. I’ve spent time in Japan, Spain, the USA and the UK working for notable financial institutions primarily in asset management, as a trader and as a portfolio manager. My passion though, has always been wine. I was born in France and I studied in Burgundy [Burgundy School of Business] where I graduated with a master’s degree in Economics, Accounting and Finance before moving to UK.  Throughout my life I have been collecting wine, buying wine, selling wine, and talking about wine – it’s always been a great passion of mine.

My first professional venture with wine was co-founding a private members club in London called 67 Pall Mall with former colleagues and friends. Obviously, it is more of a hospitality business than what I am doing now; but setting it up was a very rewarding part of my life.

I had always wanted to mix my passion for wine with my professional background.  Wine is a great investment – I’ve personally profited from buying and selling wines and thought it deserved more attention. Several years ago, I had the opportunity to meet Tom Gearing (CEO & Co-Founder of Cult Wine Investment) and discuss our various ideas of how we could work together.  I then joined Cult Wine Investment as the CIO in 2019. As CIO, I lead the complete investment function including the portfolio management and investment process for our clients.  It’s been a great adventure so far!

Liz:

Can you tell me about your Investment Management Team and their roles?

Olivier:

As the CIO, I run the research and portfolio management side of the business. The Investment Management Team has two primary objectives: we provide an investment framework ensuring that we have a structure in place to do the research and analyze and model fine wine. We are currently developing our quantitive models to assess what wines have the best potential for returns. The second part of what we do, is actively manage client’s portfolios.  We make decisions in terms of what should be done for client portfolios to deliver the performance that the clients are seeking.

We have team of portfolio managers who are responsible for constructing and managing client portfolios based on individual’s risk/return profile.  We apply a top down/bottom-up approach across AUM and at all client portfolios level including executing trades, repositioning portfolios, and taking gains or rebalance where we need to do. We apply the same care, process, and due diligence as we would if they were invested in equities, bonds or any other financial  asset.

Our portfolio managers are each based in the various regions in which we operate: Singapore, Hong Kong, Shanghai, Canada, US, and our head office in the UK.  We are the wine investment firm with the highest number of CFA charter-holders- four out of six Investment team members which is a very good ratio!

We also have two research analysts who develop models, write, and publish about wine investment, and the rationale behind what we do.  They also report on macroeconomics and advise on strategy.

Liz:

Olivier, can you give us a (general) profile of your investors, including male vs female?

Olivier:

It’s interesting question.  It’s very difficult to give you “a profile” because we cover so many different people and so many different regions – we have several thousand clients in 80 different countries.  Regionally speaking there some very big differences in our client profiles. If you look at the European regions and the UK regions the investor profile would be quite different from US/Canada or Asia.  What I would say is because of the collective aspect of the asset class we are lucky that we have interest from millennials, young aspirational professionals as well as people who are well-established, in their late fifties, are wealthy and are very interested in wine.  The common thread is that most of these people have an interest in wine and alternative investments. They don’t invest in wine just as an asset, they invest in wine because they understand that it can be used as an asset, and they appreciate wine at an emotional level as well.

Liz:

What is the ratio male vs female investors?

Olivier:

In the western world, I would say, male investors probably have the higher ratio. Whereas, if you look at Asia, we have many young females investing with us.  Interestingly, I think wine in the far east, at least in Asia, is something that is embraced by young, wealthy females.  In Asia, they value wine knowledge, so they make an effort to understand wine, study wine, and as a result they are very knowledgeable about wine.

In the US and Canada, it’s harder to say as the business is still nascent – we launched in North America just under two years ago. Currently, it’s probably equal – we have a fair proportion of female investors.  Interestingly, we also have a lot of couples investing with us. In many of these cases, the women are driving the passion side and desire to gain knowledge about wine.  They often are investing as a couple, but really interested in it as an experience and product that they like and want to learn more about.

Liz:

What criteria does your team look for in finding Investment-Grade Wines?

Olivier:

Our team’s experience is key in identifying investment grade wines.  We have proprietary models that we use to analyse past performance of wines and model the future price performance. Part of what we do is to develop these models, based on pricing, on experience, and also on hard statical facts and probabilities – i.e data – as you would with any other investment.

With respect to criteria, the brand and vintage quality are both important. The producer will give you a certain guarantee in terms of brand credibility and quality over years. However, vintage variations are also quite important, so understanding variations from one vintage to another is key. We also look at weather and past history of weather patterns and what wines are trending up or down and why. Social media is also very impactful, so we are doing a lot of work in trying to read and anticipate brand awareness and collectability as more people get interested in wine.  Critic’s scores are absolutely crucial to how a wine might perform.  Finally, we pay attention to macro & local trends across the world. For example, in Asia they might be consuming more Burgundy, whereas the US might be focused on wines from the US and Bordeaux.

Liz:

What is next for Cult Wine Investment?

 Olivier:

We want to continue to develop wine as an alternative asset class, particularly in North America where the category is not as well-known as in Europe and Asia. Beyond performance, a big part of what we do is providing unique experiences for clients alongside the pursuit of good returns on the asset class. We know our customers love wine, so it makes sense to take our community on a journey of wine discovery, connecting them with like-minded wine enthusiasts and providing a plenitude of exclusive experiences.

We believe that investing in wine should be as simple and enjoyable as drinking it. And to that end we have several exciting developments and products coming later this year that address key areas of friction for consumers in investing in wine as an asset class.

The key to our success is our unique blend of wine and financial investment knowledge, the expert guidance of our relationship managers, the powerful technology underpinning the portfolio management, and the human expertise from our investment committee and portfolio managers.

Liz:

This is my final question – what is your favorite Wine?

Olivier:

I really love that question.  It depends on three factors:  the time of the day, who you are with, and where.  If I had to take a bottle of wine and it’s my last one forever.  It would be a Musigny from a producer called de Vogue, which is in Burgundy.

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