Wine and Whisky Alternative Investments

And next, we have Maxwell Ni from Oeno Group.

Maxwell is the managing partner of Oeno Wine & Whiskey Investment.

Oeno specialized in fine wine investing by trailblazing a path through under the rate of fine wine regions and revolutionizing the way collectors interact with this unique market.

Maxwell is going to talk to us about wine and whiskey as alternative investments.

Over to you, Maxwell.

Thank you.

Awesome.

Thank you for having me, guys.

Let me just share my screen.

Give me one second.

So yes, I am the head of Australia and also the managing partner for the Ohano Wine and Whiskey Investment Fund.

We are the world's most awarded wine and whiskey investment firm.

And, you know, if you're hearing the world of wine whiskey investment for the first time,

It probably sounds a little bit intriguing and also a little bit confusing, but I promise you, you will have a full grasp as I finish this short presentation.

Okay, cool.

So just a little bit about the company.

The company has been around for about nine years.

We've been executing the strategy for nine years.

We've got about $83 million under management from all of our clients.

We have all of these awards, including a few more that were just released this year.

And we have 100 person infrastructure of a full-time team all around the world in four continents speaking about six languages.

So, you know, wine, whiskey are international assets.

They are global assets that basically transcend all economies, all languages, all cultures.

So let's get going.

So what is wine whiskey investment?

So when we talk about wine whiskey investment, we are talking about the top 1% of wine and whiskey production.

What that means is that these assets are in what we call what I refer to as the luxury economy.

So if you were to look at the world's richest people last year, you would have noticed that Bernard Arnold, the CEO of LVMH, which manages Louis Vuitton, Christian Dior, you know, Tag Heuer, pretty much 80% of the world's most successful luxury brands.

The CEO of that company, Bernard Arnold,

became the world's richest person, and he leapfrogged Jeff Bezos and Elon Musk in the same year in a contracting economy.

So you might be thinking, you know, that's pretty phenomenal.

How did he do that?

Well, he did that because when you operate in the luxury economy, when you operate in the top 1% and target basically the top 10% of income earners,

you are more or less sheltered from the broader economy because these high net worth individuals that enjoy these assets that are on the buying side of these assets, they

they are positioned very, very well to do well in good economies and also to do well in bad economies.

So by investing in these assets, you basically leverage that stepping stone into being on the sell side to being able to sell to the top one and to top 1% of income earners.

Now, how does it work, right?

It's really, really simple.

Here's an example of the champagne brand known as Dom Perignon, which is owned by LVMH.

And for example, the 2008 vintage was released the market 2018.

It's always released after it's been aged for 10 years for 1240 pounds for case of 12.

So roughly around 200 pounds per case, right.

Then what happens is that collectors, investment enthusiasts, people like us, we take it off the market, and then wait for consumption to happen.

And consumption happens as champagne pretty quickly.

So we take it off the market when very, very early when people aren't really ready to drink it, then it's drunk by

consumers, bars, clubs, hotels, private collectors, restaurants, fine wine bars, and then what we do is we then sell it back into the market at a premium when supply is scarce and demand is high.

So really, really simple.

And if you think about it like this, imagine if there's only say 10,000 bottles released, for the price to double really, really simply,

what we're waiting for is for either demand to double or supply to half that that's just really, really simple math, you know, so if we want the price to double, we want either demand to double or supply to half.

And the really, really cool, predictable thing about these assets is that it takes 10 years 20 years to make them to get them ready to sit on your table ready to drink.

and then attempt takes 10 seconds to open them.

So it's very, very easy to, to sit there and wait for supply to drop, because these design these assets are designed to be consumed.

Then, for example, later on in the market, we then sold Dom Pro on back into the market at 2140 pounds,

which is essentially a growth of 137%.

And all the while, whilst this stock is being taken off the market into new control, and it's added to a private collector's or investor's portfolio, what happens is that it's held and it's stored perfectly, in perfect conditions, it's insured, and it's independently valued.

So it's almost like investing in property, taking an investment property off the market and selling it back into the market when the market is at its highest.

Whisky is the same.

Whisky is the same whether it's with cuffs or bottles.

The increase in supply is driven up by an increase in scarcity and also an increase of demand as a result of that.

Cool.

And here's, you know, when we talk about wine whiskey investments, we're talking about hard assets.

So we're talking about we're not talking about investing in the companies, we're talking about investing in the bottles, right in the bottles, in the barrels, in the costs in the physical hard assets that can be independently valued, and independently insured.

So they're often compared to things like gold,

coloured diamonds, real estate, you know, oil commodities like corn, it's often compared to things like that.

Now, I want to give you some examples, you know, so in 2020, BlackRock, who is the largest investment manager in the world, bought up an extra $250 million worth of stock in Australia's largest wine company, the Treasury Wine Estates, which is actually based in the US, but they own Penfolds, right?

Penfolds is a very, very famous brand, probably the top top 10 wine brands in the world, in terms of luxury wine brands in terms of branding power.

So BlackRock Capital invested and essentially bought about just over 8% of Penfolds and you've got to ask yourself why, you know, why would the world's largest, best, smartest investment manager that owns about 10 trillion worth of assets in every industry specifically pick a fine wine brand?

And about two years later, we saw why.

So the Financial Review releases article, Penfold's owners lifts the price of recession proof wines, right, of which, you know, everyone last year was worried about things like inflation,

you know, putting their prices down, worried about affordability, worried about electricity costs, energy costs, water costs, all types of costs and all the while, penfolds are increased there.

The

price of their portfolio of what they call recession-proof wines, which is essentially their wines in the luxury market all around the world.

So in Australia, in New York, in Sydney, in Hong Kong, in China, everywhere, because they know that their audience will pay for it and they're happy to pay for it.

because these assets are, like I said at the beginning, luxury assets.

They don't sit in the normal economy.

So by investing in wine or whiskey, you leverage that and you can benefit from that essentially.

Here's another example.

So last year, the fine wine market in 2022, you can see the squiggly lines there.

I'll read it out to you.

Represent the FTSE 100, which is the London Stock Exchange, represents gold, represents the Hang Seng, which is in Hong Kong,

represents the S&P 500 in the States.

I don't have the ASX on there, because the ASX isn't really that big of a market compared to these.

But you can see here at the very top, the two straight lines at the top, the fine wine 100, which is the top 100 fine wines for investment and drinking purposes, and also the fine wine 1000.

So you can see here that

fine wine as an asset, and also whiskey as an asset is very, very stable.

Now, you know, past performance, of course, is not a indicative picture of future performance.

But just to illustrate to you how

how much more stability and slow and steady these assets are.

If you want to do sort of high risk investing, high return investing, fine wine or whiskey investing isn't for you.

But if you want a slow and steady double digit, non-correlated to the market term deposit in many ways, fine wine or whiskey is definitely something that I would consider.

And here's another example.

So when you invest in the fine wine whiskey market, our company has about 10 barriers to entry.

So 10 reasons why the infrastructure we've built can benefit you instead of you going to do it to doing it yourself at Dan Murphy's, for example.

And you want to have all these 10 barriers of entry, because this is what's available in the market.

And if you want to be a really smart operator, how you invest in these, in these wine and whiskeys, this is a really, really good starting point.

So, I want to address a few different type of risks because as you know, there's no risk-free investment.

In the fine wine and roe whiskey world, there's about $3 billion of fake wines, a lot of them coming out of Asia.

And just to give you an example, the top 1% of the market, the market that we invest in is only about $5 billion.

So that's three out of five.

So if you go to places like Asia, especially in places like China, where they're very, very good at creating counterfeits, there's three out of five bottles are fake.

you know, and if you think about it, it's a perfect crime, because these bottles are so expensive, they're so revered, you know, every time you buy one, you don't want to drink it straight away, you want to hold it as a trophy in your house for five years before you drink it.

By the time you do drink it, you probably had a few drinks, so you probably can't remember exactly what it tastes like, or remember the last time that you tasted it.

So it really is a perfect crime.

And that's what

That's what we want to protect investors from.

So we are one of the only winery whiskey investment firms in the world to provide a perfect stock promise where we put every single wine bottle as an example, through a 97 point proprietary scientific process.

to to make sure it's authentic so that we can guarantee it to you.

So that you know that you're not buying, for example, a fake share certificate, you want your share certificate in your investment in wine or whiskey, as an example in your bottles in your class to be 100% real and authentic.

Another way we mitigate risk is that all the stock majority of the stock is held in London City bond.

So the London City bond is a government regulated facility.

It's the gold standard for holding wines and whiskies in the world.

We held it we hold it here because for example, the king keeps on some of his assets in this facility.

It's about 150 years old.

It's a

an age old institution that's been supporting the wine whiskey trade for 150 years.

And also because it's held here, we're able to have independently valued and insured.

So you know, there's not many investments in the world you could have be independently valued and insured as as they're appreciating for you.

How do we exit?

You know, exiting is a really, really big problem in the industry.

You know, it's really, really good to have these assets, get your hands on them, to have something that appreciates the doubles in value.

But if you aren't able to exit that to someone who wants to drink it, you won't achieve its highest value, you don't have to give a discount.

Here's an example.

So when you go sell to an auction house, remember that auction houses are essentially fire sales, right?

If you have a wine whiskey collection in your in your home.

Now a fire sale usually demanded about a five 10% discount, as well as the auction house premium.

Now we want to return all of that back to the investors by selling direct to consumer as much as possible.

And to share with you what that means, we have our own fine wine bar in London, we have our own rare whiskey bar in London, we sell ecommerce, we sell direct to consumer, we sell direct to our other collectors.

And we also have an exchange that will be coming out later this year.

And here's an example of some of the restaurants and hotels and European chains that we that we sell to as well.

So here's a team, the founder of the business, my business partner, Michael dollars, number one wide investment advisor in the world.

You know, he's been in Forbes, he's been in the spears 500.

You know, whether you invest in the fund or not, you'll be investing in the stock that he personally chooses, as well as his team that has 80 years of experience in the industry.

And because I'm running out of time, I will wrap up here.

Oh, just another person I have to mention.

So Justin Nock is an Aussie.

He's in our team.

He's been in the industry about 25 years.

He used to work for the Penfolds holding company.

And he's been judging the Decanta World Wine Awards since 2005.

So I'll leave it here.

There's my name.

There's my brother's name.

My brother lives in Brisbane.

I live in Europe most of the time.

Here's our details.

We would love to get a hold of you.

Probably the easiest place to get a hold of me is on LinkedIn.

I'm addicted to LinkedIn.

I'll get back to you pretty much same day, any day of the week, even Sundays.

And I look forward to hearing from you.

Thank you, Maxwell.