With the rise of online investing, we’ve seen an explosion of interest in alternative assets. There are platforms for fine art, collectibles, pre-seed startups—and now, alcohol!
Vint is a wine investment platform that allows you to buy, sell, and trade fine wine and spirits with other investors.
Vint is one of the newer players in the game, but they’re already making waves. In just a few short years, they’ve become one of the largest online wine platforms, with over 10,000 members from all over the world. They offer a wide selection of wines, from well-known names to rare vintages, and their team of experts are on hand to help you make the best choices for your portfolio.
But is Vint a good investment? We took a deep dive into the platform to find out everything you need to know before investing. But first…
How Does Vint Work?
Vint’s business model is rather simple.
The process starts with an in-house team composed of sommeliers, winery directors, and financial analysts who identify promising wines from all over the world and build a “collection”. Vint then transports the collection to one of its partner cellars—all secure and climate controlled, of course.
Once the collection is safely stored, Vint prices the collection by adding an 8-10% “sourcing fee” to the purchase cost. The collection is then securitized with the SEC in order to offer investors fractional ownership (i.e., shares).
Once a collection goes live on Vint, investors are free to buy shares. If not all of a collection’s shares are bought, everyone gets their money back. Vint holds onto each collection until the in-house analysis and sales teams identify a profitable time to sell. When a collection is sold, 100% of the proceeds go back to investors on a pro rata basis.
Sounds great! But does it work in practice? Let’s take a look.
Vint’s Investment Performance
Since Vint’s founding in 2016, they’ve sold 30+ collections with a current portfolio value of $3 million. That’s impressive, but how have those investments performed?
Vint doesn’t make their investment performance available to the public (don’t worry, investors can track the performance of their individual portfolios through their accounts). Instead, they point interested parties to the Liv-Ex 1000—a financial index that tracks the purchase and sale prices of 1,000 fine wines from around the world.
The Liv-Ex 1000 has seen 5-year returns of 45.81%—or an average of 9.16% per year. This is slightly less than the 10% annual return benchmark for stocks and shares over the past decade.
There’s one major performance benefit that comes along with wine investing, though—stability. If you look at the chart above, it immediately becomes clear that while traditional indices have a history of dramatic increases and decreases (see: 2008), the Liv-Ex 1000 is much more stable.
This is due to the fact that wine is a non-correlated asset, meaning that its value isn’t tied to traditional economic indicators and events. This makes it an excellent diversification tool for investors who are looking to protect their portfolios from volatility.
This section is going to be a short one—Vint doesn’t charge investors any kind of management, administration, or storage fees! So, how do they make their money?
Through two main avenues:
- Sourcing Fee: Vint adds 8-10% to the purchase cost of each wine they source before determining a share price. For example, if Vint buys a bottle of wine for $100,000, they might list that bottle for $110,000. This is how they make their money on the front end.
- Investor Alignment: Vint buys 0.5-10% of the shares available for every collection. So, if Vint buys a collection and offers 1,000 shares for sale, they’ll keep 5-100 shares for themselves. When the collection sells, they make money along with their investors. This is how they make money on the back end.
Only the sourcing fee is detrimental to investors. But even the sourcing fee works out to be lower than what you’d pay if you were to invest in a typical managed fund over a similar timeframe.
Vint’s Limits and Rules
Vint doesn’t impose many limits on investors, but there are a few. The first is an ownership cap—no investor can own more than 20% of any given collection. This is to ensure that no one person has too much control over the investment.
The second limit is a minimum investment size of $25. That second one is really a benefit, though!
Investing in fine wine is almost always a long-term play. You’re not going to buy a collection of wine and turn around and sell it a week later—it just doesn’t work like that. All of that’s to say that when you invest with Vint, your money is going to be tied up for a while.
The company says that it expects to store each collection for 3-7 years before starting the liquidation process. And even then, there’s no guarantee that they’ll find buyers quickly—or even at all. Before a collection sells, there’s no way to liquidate your holdings.
Vint’s solution to this illiquidity is a secondary market where investors can buy and sell shares from each other… but this is still in the works with no firm release date set.
Vint’s Collections and Pricing
Vint offers investors the opportunity to buy shares in a wide range of collections. Some are single bottles, others are multi-bottle sets. Some are built around a winery or distillery, others are built around a theme. The variety is great, and Vint posts new collections on a regular basis—one every two weeks (give or take).
Pricing is also very reasonable, with most share prices ranging from $20-$100. This makes Vint a great option for beginner investors who are looking to get their feet wet without breaking the bank.
The only downside here is that Vint doesn’t allow investors to hand-pick individual bottles for their portfolios. So, if you’re someone who likes to have complete control over your investments, Vint might not be the right platform for you.
Pros and Cons of Vint: The Pros
- No management, administration, or storage fees
- Strong, stable asset class
- Cheap investment minimums
- Great for beginner investors
Pros and Cons of Vint: The Cons
- 3-7 year liquidation timeline
- No individual bottle selection
- No secondary market
Should You Invest with Vint?
As with any investment platform, there are pros and cons to using Vint. And whether Vint is right for you will ultimately come down to your personal investment goals and preferences.
That being said, we believe that Vint is a great option for beginner investors who are looking to get started in the world of fine wine investing. The company offers reasonably priced collections, has no management fees, and makes it easy for investors to get started.
If you’re an experienced investor who likes to have complete control over your portfolio, Vint might not be the best fit. But if you’re open to investing in a basket of wines as a wine enthusiast, Vint is definitely worth checking out.