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Cult Wines Posts Strong Financial Results


Posted in: Cult Wines News

Tagged: General

Global Expansion Marks 10th Anniversary of Leading Fine Wine Asset Manager

Cult Wines Limited, the award-winning wine asset manager, today announces record performance figures for 2017 and continued international expansion with the opening of a new office in Shanghai.

Strong financial performance

Cult Wines, which celebrates its tenth anniversary this year, has seen its annual revenues increase by 67% to £33.9m driven by growing demand for fine wine in the UK, Europe and particularly Asia, where sales increased by 123% in 2017. Asia now accounts for 33% of total revenues (up from 26% in 2016). Assets under management now stand at £65m and the firm expects total revenues to reach £55m for the forthcoming year. The firm’s client base has grown by 28% and it now manages private and trade portfolios across 71 countries.

Investors turning to fine wine to mitigate equities market correction

Cult Wines’ financial performance is supported by investment returns with the Cult Wine Investment Performance returning 10.3% over 2017, outperforming the Liv-ex recognised benchmark, which returned 5.7%1. During 2017 Cult Wines saw new clients choosing to diversify their portfolio by investing in fine wine to mitigate a potential correction in equities markets.

International expansion

Given the growing importance of Asia, Cult Wines has opened an office in Shanghai to strengthen its Chinese presence, having established an office in Hong Kong in 2016. China is already the single biggest consumer of luxury goods globally with 29% of total spend across the whole Asia Pacific region and Cult Wines is seeing significant growth in rare and fine wine investment.

Tom Gearing, BBC The Apprentice (2012) finalist and Managing Director at Cult Wines, said, “Last year was a landmark for us that culminated in these robust figures, multiple award recognition, growth of our international activities and a strong platform for growth into 2018. Our new office in Shanghai will be followed by additional geographic expansion and further investment opportunities.”

“Through our long-term partnership strategy of working with private banks, asset managers and family offices we are now seeing a significant increase in revenues from these sources as their clients are increasing their exposure to wine as a consistent and above average-performing part of their overall portfolio.”

Phil Gearing, Chairman of Cult Wines adds, “To post these strong financial figures underlines the essence of what we do in taking a financial market approach to fine wine investment and delivering consistent and above average returns to our growing client base. Over the last 10 years we have succeeded in building a business that balances market leading fine wine expertise and knowledge with an asset management and technical perspective and approach. We would like to take this opportunity to thank our clients, partner agents and staff for helping us achieve this.”

“During the year we saw some trends around new client portfolio diversification into fine wine as a defensive position in the event of an equities market correction, existing client investment into new growth areas, including the USA, and as a long-term stable asset holding for retirement planning. We continue to invest in the firm’s infrastructure and staff to manage and fulfil our clients’ investment aims and find new areas for growth”, concluded Patrick Thornton-Smith, Commercial Director at Cult Wines.

(1) The Cult Wine Investment Performance is calculated from October 2009 by including all positions held by client by wine and vintage, individually entering the index rebased to 100 in the month of purchase and re-valued monthly using the Liv-ex Benchmark Market Price. The CW index increased 10.3% from Jan 1st – Dec 31st 2017 compared to a 5.7% gain in the Liv-ex 100 in 2017* (the industry’s leading benchmark).

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