Fine wine investment: how to turn wine into profit

The following article was written by Amy Matthews and published in GQ. It features an interview with Simon Larkin, MW, Atlas' Managing Director. You can read the original article on the GQ website. 

What’s the most you’ve ever spent on a bottle of wine?
Chances are it’s less than £424,000 which is what a 1945 Romanée-Conti went for at Sotheby’s in New York last month, breaking the sale record for a single bottle. With pretty consistent growth and the possibility of big returns, wineinvestment may seem like an easy win, but how should you go about getting a lot for your bottle? GQ is here to answer all your questions, advising you when to open your wallet and when to put a cork in it.
 
Do I have to be a wine expert to invest in it?
You don’t have to be able to sniff out a 1934 Château Lafite at ten paces, but it’s really going to help if you’re familiar with the essentials of regions, grapes and producers. Equally, tracking the numbers, movements and trends of the market is a good idea if you’re going to part with your hard-earned cash with no guarantees, so make sure you get your geek on and you’ll have a much better understanding of which wines are likely to outperform others. As Ella Lister, founder and CEO of Wine Lister says, “If you want to get your hands dirty, you need to have at least some basic knowledge. You can supplement that with online tools like Wine Lister to look up specific wines, their price history, liquidity, brand strength and relative value.” Liv-Ex is similarly a good online resource – they offer comprehensive coverage of the fine wine market.
 
So, once I’ve done some preparation, what’s next?
“First, decide how much you want to invest (not more than 10 per cent of your assets) and how involved you want to be.” advises Lister. “There are various investment-driven wine clubs, portfolio managers or even full-blown funds. Or you could simply open a storage account and start buying some wine in bond, maybe en primeur (upon first release and before the wine is bottled) – for this you'll need a helpful wine merchant or three, but also independent information sources to make sure you're buying the best wines at the right price.” According to Simon Larkin, master of wine and managing director of Atlas Fine Wines, it’s worth finding a reliable source for your forays into the field. “Finding someone who you trust is important; they should have a proven history in the trade, be able to show their experience and be able to explain exactly how they operate.”

Which wines and regions are worth investing in?
While the category of premium wine has never been more diverse in origin and style, you still need to limit yourself to the most traditional wine regions if you’ve got your eye on making some money. Lister explains further: “Bordeaux is the mainstay of most investment portfolios thanks to its liquidity, but Burgundy prices have grown much more quickly over recent years. Tuscany and Piedmont are the Italian parallels of Bordeaux and Burgundy and deserve some space in a wine investment portfolio.