📄Syndicate vs. Fund

How WineFi's syndicate structure differs from other investment vehicles. This section is provided for summary information purposes only by WineFi and should not be taken as either legal or tax advice

Introduction

A common question we receive is how a syndicate differs from a fund—or from a “Collective Investment Scheme” (CIS) more generally.

The Basics

• Syndicate – A single deal co-investment. Investors decide to invest alongside each other in a specific opportunity, and each owns their share directly (via a nominee on bare trust).

• Fund / AIF – Typically formal investment vehicle (hedge fund, venture capital fund, etc.) that is often a CIS, managed by a single operator as a pooled structure in accordance with a defined investment policy.

• CIS – A broad regulatory category covering arrangements over property of any description which enable investors to participate in profits arising from the acquisition, management and disposal of such property. Investors must not have day-to-day control over the management of the property.

What is a Syndicate?

A Syndicate is a self-governed structure formed by a group of investors to acquire a specific asset(s) - in our case a collection of investment-grade wine. Each Syndicate is established for a single opportunity, with assets held via a nominee on a bare trust basis, ensuring that each Member retains beneficial ownership of their proportionate interest at all times.

In contrast, a Collective Investment Scheme (CIS) is often a pooled investment structure in which participants contribute funds to be managed as a whole by an operator, manager, or governing entity. The scheme is established for the purpose of generating profits from the collective management of assets, with participants holding rights to a share of the scheme as a whole rather than direct beneficial ownership of the underlying assets. The property of the scheme is managed on a consolidated basis, and participants are dependent upon the expertise and discretion of the manager in relation to acquisition, holding, and disposal of investments.

The Rights of Syndicate Members

Syndicate Members benefit from clear rights and protections, including:

• Decision-making authority – all strategic decisions related to day-to-day control over the wine are taken collectively by the Syndicate, either by majority or unanimous vote depending on the matter at hand. Every Syndicate Member has an equally-weighted vote.

• Beneficial ownership – each Member retains full beneficial ownership of their proportional holding of the wines, recorded in a register of ownership and safeguarded by a nominee on bare trust. The wines are stored under individual investor names in a dedicated sub-account at our warehouse, so that in the unlikely event that WineFi ceases trading, the wines remain the property of syndicate members.

• Transparency and reporting – Members receive regular updates on valuation, performance, and market conditions, ensuring visibility over their holdings. All syndicate members will receive an invite to the WineFi platform - allowing them to track the value of their assets in real time.

• Liquidity pathway – exit opportunities may be presented by WineFi or Syndicate Members themselves throughout the lifetime of the syndicate, with sales executed only upon approval of the Syndicate. As sales are made throughout the hold period, proceeds are distributed pro rata to each Member’s entitlement.

How Syndicates Differ from a Fund

Unlike a traditional fund structure, Syndicates offer direct and active participation, while avoiding ongoing asset management charges or delegation of control:

• Day-to-day control – decisions are made by Members via a voting system, not delegated to a manager; WineFi acts only as operator.

• Deal-by-deal opt-in – investors choose whether to join a Syndicate on each opportunity, rather than committing blind capital to a pooled strategy.

• Theme-specific analysis – Syndicates are designed around particular wine themes or collections, meaning that each collection has its own unique analysis.

• No ongoing annual management charges – apart from a one-off administration fee to cover sourcing, storage, and insurance, no recurring charges are levied.

• Direct Ownership – assets are held in Syndicate names through the bare trust nominee structure, preserving transparency and clear lines of ownership.