# WineFi vs. Status Quo It is a fact that many fine wines appreciate in value over time, and therefore can make investors money. It is also a fact that the traditional wine investment model creates a conflict of interest between the interests of clients and asset managers. WineFi is designed to solve these issues — it's literally the only reason we exist. Here is how we do it: ### We Don't Hold Stock A traditional wine merchant holds stock to sell to their customers. They make money by marking up that stock from purchase price. If their customers are buying to drink or to collect, there is no conflict of interest. However, if a customer is buying to invest, there is a clear conflict. Merchants are incentivised to sell the stock that they are holding, rather than source the wines that may be the best investments on the open market. At WineFi, we hold no stock. We buy exclusively from the secondary market on behalf of our clients. This is good for our clients, as we have no incentive to buy anything than the most investment-worthy wines. It is also good for us, as we avoid upfront capital expenditure and only buy to service demand. Our fixed costs, for the most part, are therefore our employees' salaries. We only make money on fees, rather than an undisclosed mark-up on the wines themselves. ### We Rarely Buy On Allocation {% hint style="info" %} Buying on allocation means purchasing wines directly from a producer at release, often tied to (in the context of "investment") less desirable secondary wines. {% endhint %} **At WineFi, we buy — almost exclusively — from the secondary market**. We rarely buy on allocation. This is because our data demonstrates that, contrary to popular belief, buying on allocation is **no longer** the best way make money from investing in fine wine. An example of the research we have conducted on this theme can be [found here](https://winefi.co/blog/when-is-the-best-time-to-invest-in-fine-wine). Beyond that, if you are buying on allocation directly from a producer, you are almost always beholden to also purchase their secondary wines — i.e. those that may not be truly investment-grade. For a wine investment business, the question is then what do you do with those "spare" wines? More often than not, they end up in client portfolios. This is clearly not in the investor's interest, and therefore a violation of fiduciary duty. ### Institutional-Grade Analysis WineFi has, to our knowledge, developed the most sophisticated investment modelling capability in the fine wine market. Most wine businesses rely on a narrow set of inputs when selecting wines for "investment" portfolios - typically limited to "critic scores vs. pricing data". If scores are high and prices are relatively low, then it is supposedly a "buy". While these indicators have some value, they capture only a fraction of the factors that truly determine long-term investment performance. By focusing narrowly on scores versus price, such models overlook critical drivers such as producer historic returns, drawdowns market depth, critic rescores, trading velocity, brand equity, and macroeconomic conditions - amongst others. This oversimplification leaves investors exposed to unnecessary risk. Fine wine, compared to other collectibles, has a significant amount of historic data available to analyse. It is therefore possible to backtest scenarios, and understand what factors are responsible for price movements. When constructing portfolios, we combine this analysis with the multi-decade expertise of our veteran investment committee. This is at the heart of what we do at WineFi. The existence of market benchmarks (e.g. the [Liv-ex Market Indices](https://www.liv-ex.com/news-insights/indices/)) allows us to measure our performance against the broader market. If we are outperforming the wine market, then we are doing our job correctly, and vice versa. {% content-ref url="/pages/S11OQyXYddvj70e6iCxy" %} [Investment Approach](/about-us/investment-approach.md) {% endcontent-ref %} ### Expert Guidance Fine wine is an esoteric asset class, and choosing what to invest in is complex. Thousands of wines are released each year across multiple regions, adding to hundreds of thousands of "back vintages". Each vintage interacts differently with market conditions. Prices are further shaped by the secondary market, where back vintages can trade at premiums or discounts depending on availability, market appetite, and evolving critic sentiment. For individual investors, this creates overwhelming choice and a high risk of error. WineFi simplifies this process by providing a quantitative framework that analyses more than 70 variables - from supply dynamics and trading velocity to macroeconomic indicators - and presenting these insights to investors in a clear, accessible way. This enables investors to make informed decisions about their participation in a syndicate or a private portfolio, without the subjectivity and opacity that characterises the traditional model. ### Transparent Fees **We charge a one-off administrative fee of 12.5% for both our private clients and our syndicate members.** We take no undisclosed mark-up, and there are no hidden fees beyond disclosed trading costs. Our administration fee covers storage and insurance for five years, and also covers WineFi's costs. If the underlying wines are held for longer than five years, additional storage and insurance is deducted - at cost - from the eventual sales price of the wine. Importantly, any discount we can achieve to the [Liv-ex Market Price](https://www.liv-ex.com/faq/liv-ex-prices/) is passed on to our investors. Some wine businesses advertise “no upfront fees.” In reality, this means they apply a variable, hidden margin to the wine itself by marking it up against the market price — a practice that reduces transparency and misaligns incentives for investors. Our structure reflects the real costs of sourcing, due diligence, execution, and custody. We take no margin on storage or insurance. {% content-ref url="/pages/U3xpGYteKtraI1rPYrBi" %} [Fees](/governance/fees.md) {% endcontent-ref %} ### Lowering Barriers to Entry Investing in fine wine has historically been an expensive endeavour. Our analysis shows that a global, optimally-diversified portfolio of wine can cost upwards of £300,000 | $400,000. In contrast, our **syndicate structure** allows investors to gain exposure to fine wine as an asset class from as little as £3,000 (\~$4,000). WineFi’s core model is built around **syndicates**, where investors co-own a clearly defined collection of fine wines. Each syndicate is disclosed in advance, and investors retain direct fractional ownership of the underlying bottles, ensuring transparency and avoiding any pooled, discretionary management. This structure allows investors to gain exposure to a diversified portfolio of investment-grade wines at a fraction of the cost of building such a collection outright. {% content-ref url="/pages/H3NnzsUt9VCyTVEh1Sqm" %} [Fine Wine Syndicates](/investment-solutions/fine-wine-syndicates.md) {% endcontent-ref %} Alongside syndicates, WineFi also supports **private clients** who wish to build their own collections, which are owned entirely by the individual from the outset — whilst utilising the same quantitative modelling we provide to syndicate members. All of our investment decisions are data driven, and members are able to track the performance of their portfolios in real time. {% content-ref url="/pages/JkI4cYzoV5kL0oRbTLfr" %} [Private Portfolios](/investment-solutions/private-portfolios.md) {% endcontent-ref %} --- # Agent Instructions: Querying This Documentation If you need additional information that is not directly available in this page, you can query the documentation dynamically by asking a question. Perform an HTTP GET request on the current page URL with the `ask` query parameter: ``` GET https://manifesto.winefi.co/about-us/winefi-vs.-status-quo.md?ask= ``` The question should be specific, self-contained, and written in natural language. The response will contain a direct answer to the question and relevant excerpts and sources from the documentation. Use this mechanism when the answer is not explicitly present in the current page, you need clarification or additional context, or you want to retrieve related documentation sections.