Even to those with sharp business acumen and a love of savoring a glass of fine wine, investing in the wine market can seem intimidating at first glance. One such individual who has made the leap from prestigious investment career in the City to the world of fine wine is Daniel Walker. Daniel who now heads up the investment arm at OenoFuture who were recently named as the best fine wine investment company in Europe at The European Global Business & Finance Awards. We spoke to Daniel to learn what it takes to succeed in the fine wine investment and how the wine market has always provided stability in times of economic fragility.
Daniel, you started out working for trading companies and later moved into the commodities sector and private hedge funds. What was it like moving from an investment career in the City to a fine wine investment company?
I began my career working for trading companies, but I soon realised that this sector wasn’t satisfying my core values and ambitions. I enjoyed incredible success heading up the investment arm of a large London-based company and quickly proved my skills at generating market-beating returns.
My accomplishments during this period of my life propelled me to seek out new challenges. It was actually in a wine bar where I was enjoying a drink after work with colleagues that the monumental potential in fine wine investment first hit me. I was then put in touch with the founder of OenoFuture, Daniel Carnio, by a mutual friend and we realised how our respective areas of expertise could complement each other. Since the fine wine market can be daunting for outsiders, even those who have a background in investment, Daniel spent many hours convincing me that I could excel in the wine market despite my previous lack of exposure.
What excites you about the fine wine market and why do you think it should be on investors’ radars right now?
When I’m speaking to potential investors I like to start by pointing out that the wine market has always provided stability in times of economic fragility. We’re living through interesting times when market stability cannot be relied on and I continually encourage investors to diversify their portfolios and seek out new opportunities.
What is so exciting about the wine market to me is that wine is a unique commodity in that it can be both collected and consumed. Whenever bottles of rare wines are consumed, the rarity of the remaining bottles of that wine increases and so does their value. This is a hugely attractive factor for an investor, especially when coupled with the fact that more and more wealthy individuals in developing countries are buying and consuming fine wines.
What makes OenoFuture different from all the other fine wine investment companies out there?
I believe our approach is unique in the market because since the very beginning Daniel Carnio has had a vision to pursue less well-known wine regions which are rich in potential. Daniel’s exceptional wine knowledge combined with our financial expertise makes us perfectly placed to get ahead of the curve. Instead of focusing all our attention on traditional blue chip investment strategies like Bordeaux En Primeur campaigns, we’re able to specialise in top boutique estates from California and Italy that are the true rising stars of the fine wine world. Californian wines in particular have rocketed 48% since the announcement of Brexit and we expect this trend to continue as the wine world wakes up to the potential tucked away in these under-the-radar regions.
And finally, what does the future look like for the fine wine market? How do you think the market will react in the longer term to the potential effects of Brexit?
Of course, it’s impossible to talk about the future without mentioning Brexit! At the moment there is still huge uncertainty and that’s being reflected in the markets. The good news is that the fine wine market has historically displayed a remarkably low correlation to to mainstream assets like stocks and shares. Also global corporate debt is at 13tn and I think this is another key factor that could explain why investors are seeking asset backed financial refuges in times of market turmoil. Investing is like riding a bike, if you don’t remain in constant motion, the likelihood is that you will lose balance. So it is impertative to adapt and modify depending in the market environment.
It is still impossible to predict what impact Brexit will have in the longer term, but the resilience of the fine wine market has been proven time and time again. Thanks to the continued strong growing demand for fine wine from countries like China and the United States, the world’s appetite for fine wine is hungrier than ever before. One final thought to end on for those worried about the impact of Brexit – when Brexit was announced sterling quickly fell to a 30-year low, whereas the wine market saw a spike of 25%!