How profitable is investing in fine wine? Just ask Cult Wines CEO Atul Tiwari

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When an old baseball card or other collectible sells for thousands of dollars—or more—ordinary people often leap into the market. Last year, Tiwari—a member of the Confrérie des Chevaliers du Tastevin, a global society of Burgundy aficionados—became CEO of Cult Wines Americas, which gives investors title to cases of fine wine without having to store the stuff themselves.

Tiwari used to be a securities lawyer. He spent 17 years with Bank of Montreal, including setting up and running its ETF division, and was CEO for Canada for Vanguard Group, the U.S. fund giant, for seven and a half years. Cult Wines Ltd., the global parent for Cult Wines Americas, is based in London.

“Everybody who has a home cellar has had their cooling unit break down,” he says—and yes, he has a home cellar, too. If the wine you store there is an investment, is it insured? And can you document its provenance? New blockchain technology will let Cult Wines trace history back to the vine.

Liv-ex is a London-based exchange for wine, and it updates its 1000 index of the world’s most traded fine wines daily, as well as sub-indexes. “In 2008, the S&P 500 was down 38.6%, but the Liv-ex 1000 was down 0.6%,” Tiwari says. “It’s a really great buffer for your portfolio.”

“France still dominates,” he says. About 80% of Cult Wines’ benchmark allocation is in Bordeaux, Burgundy and Champagne, 10% is Italian, and 10% is the rest of the world. And London still dominates trading. Cult Wines stores its almost 100,000 cases in a refurbished airplane hangar.

“Cult Wines is not securities regulated, because you actually own the wine,” Tiwari says. The company doesn’t issue securities, such as depository receipts. But it is transparent and follows know-your-client procedures. There’s lots of financial data and lively wine lore on its website, too.

“Part of our mission is to make wine investing more accessible—bringing in younger demographics and people of colour like myself,” he says. Cult Wines portfolios start at $12,500 in Canada. And from $390 million under management worldwide now, it’s aiming for $1.5 billion within five years.

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