Wine is a very malleable tool, one that can be used to address a broad array of investing remits. However in today’s market we believe utilising this investment vehicle effectively, requires a more thorough approach to research and subsequent application. One centered around a more detailed understanding of both the investor and the products case by case variability. There are two strands to our approach, understanding the goals of our investment. Then deeply understanding each investment case’s utility to combine these two elements into an effective, aligned portfolio.

Creating an Investor Profile

Our approach begins with creating a deep understanding of your profile as an investor and your investment goals.

Our KYC process will focus on key elements such as timelines, attitude to risk, potential liquidity requirements, desired returns as well as general goals for the portfolio.

Once we have this information we can use this investor profile to match you with one of our distinct and curated BiBO Portfolio Types.

BiBO Portfolio Types

While each investor’s goals are unique, we have found that most investment profiles can be effectively grouped based on their parameters for risk and timelines. We have therefore created 5 portfolio types that act as models to help direct and inform both ourselves and the investor.

BiBO Wine Investment Portfolio Types

These 5 portfolios span a spectrum from ultra conservative risk-off portfolios, targeting multi decade timelines. To those far shorter alpha centric collections, with timelines around 3-4 years and a large appetite for risk.

Each portfolio contains model percentage distributions of our BiBO “Investment Segments”. These percentage distributions reflect how we utilise different compositions of wines to ensure that the investment goals are met.

Investment Philosophy Summary

Our methodology is centered around a core goal. This is to find and invest in genuinely exceptional wines, regardless of their role within the portfolio. The term we like to use is “High Watermark Iterations”. This could be best ever vintages, highest scoring iterations, globally significant brands, and often all these attributes are combined into one. We know that it is these outstanding items that record the most impressive gains, and often are the drivers of indices as a whole. 

We recognise that these truly outstanding fundamental qualities have a profound effect on the wine’s market dynamics. They ensure each wine, and therefore the wider portfolio, are well supported by consistent demand in negative market periods. Then in more favourable markets, these characteristics are what enable the wines and portfolio to starkly outperform the indices.

Wine Analysis and Categorisation

We have created a process and set of metrics that help us to create the all important market profile for each wine. 

These metrics look at third party provided data such as critic scores, production volumes, vintage scores and of course price data. However we also have some internal metrics that we have created, brand power profit windows and so on. 

Every wine that comes into us as a trading opportunity is reviewed. This review is then stored in our database. We have personally reviewed thousands of wines through this process.

Wine Investment Analysis

We then use these metrics as a filter to initially simply discern whether or not the wine could be used as an investment tool. Then if it can, we can drill deeper to identify which segment the wine fits into based on inferences and estimations around profit windows, timelines and so on.

BiBO Wine Investment Segments

We have three investment segments that act as buckets to group together wines with similar characteristics and therefore investment utility. 

Stable Core: 

These are wines that are typically very abundant on the market and therefore have very available liquidity and price data. They are also going to be the most stable in terms of price volatility. They can be exited quickly if required. The use of these wines within a portfolio is to provide long term returns and impart stability on the portfolio. This stability comes with a lower return potential. We believe these wines need to be held for 8+ years and return expectations should be expected to be low to mid single figures per year when annualised. They are useful if an investor may have liquidity requirements during the term. Classic examples are blue chip Bordeaux wines.

Wine Investment Segment - Stable Core

Diversified Growth: 

These are wines that we have found to contain more potential returns. We would want to see these wines returning per year high single figures, if not low double figures when annualised. They are also going to align with a mid timeline in the region of 5-7 years. These wines typically come with a slightly lower level of liquidity, increased volatility and sometimes the potential for a slower exit timeline. The sticker value per bottle is also going to be limited here, as the price per bottle definitely has an impact on the exit timelines and volatility. Good examples of these wines are most Super Tuscans, most Champagnes and mid level Burgundy cases.

Wine Investment Segment - Diversified Growth

Alpha Generation:

These are wines where the primary goal is return on investment. Typically these wines are going to be very rare and therefore price opacity is high, volatility is high and exit liquidity potentially poor. This opacity is where the gains come from and we therefore want to combine ultra high quality scoring items with scarcity. These wines can be used along a shorter timeline due to their volatility profiles. Finally, per bottle prices are going to be much higher.

Wine Investment Segment - Alpha Generation

By categorising every single wine into an investment segment, we can ensure that they are primarily never used inappropriately. However more importantly we can help our investors understand the rationale and design of their overall portfolio at each step. Ultimately our investors know that their portfolio is correctly aligned with their goals.

Wine Sourcing and Purchasing

The really important part of this process is being able to find suitable cases to match an investor’s needs at the correct prices. It is crucial to the integrity and effectiveness of the process that we never force something to fit. 

To achieve this we do not hold cash stock. This is to ensure we are never burdened by our need to clear stock from our stock list. This has also included our withdrawal from all En Primeur events.

We are only able to be this discerning by having a combination of sourcing methods that ensures we are always able to meet our investor’s needs. 

Firstly, we have a small number of excellent high end suppliers. Some of whom hold money-can’t-buy allocations. They supply us with access to some of the rarest stock in the world. 

Secondly, we have an incredible piece of proprietary BiBO software. This software sits across every major exchange and constantly scans for value. By utilising our refined lists of investment wines, we are able to cut through lists and be made aware of opportunities first. Only through years of testing in combination with hundreds of hours of investment reviews are we able to have such a powerful weapon. 

With this incredibly powerful sourcing mechanism, we are able to pass on even more benefits to our investors. We also sell our investment wines at or below the best price in the UK. If we are able to source a long way under the market, we will pass that on. It is not uncommon for us to sell a wine with more than 10% discount to the best UK price. There is no commission, no management fee, just a pure price.

Combination of Investor Profile x Portfolio Type x Wine Analysis and Selection

The easiest way to understand our approach is with an example. 

Step 1:

Investor A has given us his investment parameters and goals. These include:

  • A timeline of 10+ years.
  • A requirement to hold 50% of funds allocated in low volatility items that offer good liquidity. 
  • The goal is to average 6+% across the investment. 
  • A balanced attitude to risk, stating an openness to all stock types. 
  • A one time investment of £50,000. 

Step 2:

Investor A’s profile matches well with our portfolio type 3. 

Portfolio Type 3 consists of:

Stable Core – 50% / £25,000

Diversified Growth – 35% / £17,500

Alpha Generation – 15% / £7,500

The rationale for this portfolio distribution:

The Stable Core segment will contribute the low volatility and high liquidity characteristics. The returns contribution will be low to mid single figures across the timeline. Examples of applicable stock: Young 100 Point First Growth Cases. With this sum we would look for 4 cases.

The Diversified Growth segment is where we are going to target more growth. This element should contribute mid to high single figures when annualised across the timeline. Examples of applicable stock: Boutique Top Scoring Champagne, Best Ever Napa or Tuscan Cases. With this sum we would look for 3 to 4 cases.

The Alpha Generation is the segment where we are actively seeking max risk and volatility. Here we are looking for the rarest, highest quality item we can within the budget. This item is tasked with returning 10+% when averaged over the timeline. Examples of applicable stock: A top vintage Armand Rousseau Grand Cru. With this sum we would look for 1 case. 

Step 3:

We would then begin the process of sourcing bespoke cases for this portfolio. As each investment is a unique combination of total funds, goals and stock requirements, we do not hold a cash stock position. BiBO will go and source your cases through our small number of allocation holders or our software.

Combination of Investor Profile x Portfolio Type x Wine Analysis and Selection

The really important part of this process is being able to find suitable cases to match an investor’s needs at the correct prices. It is crucial to the integrity and effectiveness of the process that we never force something to fit. 

To achieve this we do not hold cash stock. This is to ensure we are never burdened by our need to clear stock from our stock list. This has also included our withdrawal from all En Primeur events.

We are only able to be this discerning by having a combination of sourcing methods that ensures we are always able to meet our investor’s needs. 

Firstly, we have a small number of excellent high end suppliers. Some of whom hold money-can’t-buy allocations. They supply us with access to some of the rarest stock in the world. 

Secondly, we have an incredible piece of proprietary BiBO software. This software sits across every major exchange and constantly scans for value. By utilising our refined lists of investment wines, we are able to cut through lists and be made aware of opportunities first. Only through years of testing in combination with hundreds of hours of investment reviews are we able to have such a powerful weapon. 

With this incredibly powerful sourcing mechanism, we are able to pass on even more benefits to our investors. We also sell our investment wines at or below the best price in the UK. If we are able to source a long way under the market, we will pass that on. It is not uncommon for us to sell a wine with more than 10% discount to the best UK price. There is no commission, no management fee, just a pure price.

How Can You Get Started

If you have an existing portfolio we offer a free investment review. This includes a line by line review of your stock to ensure that you understand the effectiveness of your portfolio. You can find out what portfolio type you are and if your goals are being accurately embodied. 

If you want to start off with a lump sum, we welcome you to get in touch. Typically our investors look to start with a minimum of £10-15,000. This allows for an effective build.

If you wish to build case by case you are also welcome to get in touch. We can create an end goal portfolio composition and build steadily towards that. As a very rough guide the minimum case value is roughly £1,000. 

All you need to do is fill out our “start investing” form, or share your details so we can schedule a call. We can have an exploratory call to go over any final questions you might have and go from there.