Paulo Pinto: Founding Member’s view on Fine Wine Investment

by Dec 3, 2019Interviews0 comments

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Alti Wine Exchange was born in 2017, when a group of people, including myself, with extensive financial backgrounds were shocked with negative interest rates, and decided to create an alternative exchange platform to offer fine and rare wines for trading. Since then we have made quite a progress with our platform, continuously improving it step by step, gaining deserved recognition among wineries and investors.

I already had plenty of knowledge about fine wines, but there still was a lot to learn, so I decided to visit wine producers personally in order to understand how are fine wines actually produced by talking to the owners, tasting wines, and participating in the harvesting process. During one of these visits at Chateau Coutet, a friend from Hong Kong asked me what I thought about fine wine as an investment. My answer to him was:  ‘’it’s not popular yet, and that is a good thing’’. With 30 years in finance I have seen my share of bubbles, and speculative manias that catch everybody’s interests, and when that happens — it’s never a good thing. In my experience, good investments are known only by a few, we call them the ‘’insiders’’.

After travelling around wineries in France and Portugal my confidence in Alti Wine Exchange project grew — I saw that an open and transparent marketplace for trading fine and rare wines worldwide will be a great addition to regular stock exchanges. If we were to build that unique blockchain-based platform, I saw plenty of benefits, including:

  • Physical enjoyment of the investment by asking for delivery.

  • Perpetual demand since wine is a consumer product.

  • Continuously declining supply, while demand increases or stays the same.

  • Tax advantage

As you now know, we decided to have a go with our platform and it was the right decision. Fine wines grow in value, because there’s a very limited supply of bottles available from the beginning, and even fewer of them are left over the years, since it’s being consumed by other collectors. Interestingly, according to Barclays Wealth and Investment Management, over a quarter of all high net worth individuals have a wine collection, but at the same time only 1% of all wines produced globally can be considered fine wines. That said, even though there are very few fine wines out there, the fact that wine investments are not popular yet makes it a goldmine for alternative asset investors.

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