Fine wine trading platform Cavex and luxury asset lending specialists, Suros Capital have joined forces to assist clients with trading their wine collections. For Suros Capital, customers seeking to benefit from their fine wine collections, will be able use the Cavex platform to quickly realise capital. Likewise, those looking to increase their fine wine portfolios can benefit from Cavex’s low commission fees.
For Cavex clients, the partnership with Suros Capital will offer wine collectors access to a quick, confidential, and cost-effective form of borrowing held against their current portfolios to free up funds for further growth opportunities.
Speaking about the partnership, Stephen Maunder, founder and CEO of Cavex said: “Being able to offer our clients access to fast, available funding is a welcome addition to the services we offer to members of Cavex. Suros Capital offers a discreet and highly efficient operation and with competitive interest rates, their short-term loans can be an effective way to leverage an existing investment.”
Fine wines continue to offer attractive investment opportunities, particularly when storing a collection in a bonded facility which offers increased tax efficiency for investors. Through this storage method, wine can be purchased, warehoused, and resold, with tax only being due when the wine leaves the-facility.
Charles Hodge, Suros Capital’s Business Director added: “We’re delighted to be working with Cavex and this partnership brings a further level of expertise and benefits to our clients, allowing them to take advantage of the varied services Cavex offers its members and, of course, the beneficial use of its trading platform.”
Fine wine up over 127% in 10 years
According to the Knight Frank Wealth Report, fine wine has increased in value on average 127% in 10 years, making it a strong option for savvy investors looking for growth opportunities outside of the usual routes.
“More than ever, this year has been about timing in the capital markets and, if you got that wrong, the chances are you got it expensively wrong. Not so for wine,” observed Miles Davis of Wine Owners, which calculates the Knight Frank Fine Wine Icons Index. “Unlike after the global financial crisis, the wine market has held its nerve, merchants did not mark down prices and the market has been stable. Investors are about, and even Bordeaux prices feel like they are firming up.”
The Knight Frank index of viticultural icons, up 13%, outperformed broader market stalwarts such as Bordeaux first growths (+5.8%) in 2020, but couldn’t keep up with the still rampaging older vintages of super-Tuscans that saw annual growth of 18%. Back vintages of Champagne (+14%) were also notably strong. Burgundy was up 11.5%.
While Covid-19 has disrupted luxury markets in the short term, climate change is the bigger influence for the wine trade, according to Davis. “Global warming is affecting classic wine regions, Burgundy markedly so given the sensitivity of Pinot Noir to excessive heat. One merchant talked of 2019 being a benchmark vintage for the ‘New Burgundy’ – in a warmer, richer mould.”
