Q&A with Jacob Ner-David of Vino Ventures
Managing Partner
Principal Series:
Vino Ventures (VV) is a multi-strategy investment vehicle designed to generate returns from the inefficiencies in the USD 300 BN global wine market. The fund will target a total return of around 20% p.a.”. Typically, other wine funds focus only on a long-term buy-and-hold strategy. The primary differentiation in VV’s strategy is consistent cash yield generation through short-term tactical trading in combination with long-term capital appreciation.
Wine as an alternative investment has delivered attractive, uncorrelated returns with a lower risk profile compared to other asset classes. Wine is a physical and consumable asset and investment returns depend on efficient and selective sourcing, sophisticated distribution and a strong executing team.
The investment fund is structured as a traditional LP that has the optionality to convert into a digital security vehicle that offers the fund operating efficiency and provides investors access to secondary market liquidity.
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Why is now a good time to invest in the wine market?
The Covid19 pandemic has resulted in widespread dislocation in the wine market. Distressed wineries require inventory financing, supply chain disruption has caused an inventory build up along the value chain, which along with weakening currencies, has depressed prices of wine. This has created select opportunities for attractive entry purchase prices.
How has wine as an asset class performed over the long-term and especially during severe market drawdowns like the 2008-2009 financial crisis and now the covid-19 pandemic?
Wine has both long-term appreciation potential as well as defensive, capital preservation characteristics which provide downside protection during market draw-downs.
Over the long run, returns on fine wine have averaged in the low teens which is similar to equities, real estate, and commodities. However, these returns were generated with lower volatility of around 4% p.a., thus producing superior risk-adjusted returns.
During periods of major market draw-downs, wine as measured by broad based indices such as Liv-ex 1,000 index and Top500 index (from Wine Market Journal) has delivered defensive, uncorrelated returns.
Why is now the right time to invest in a total return wine fund? Why shouldn’t I just buy publicly traded equities with exposure to wine or build my own portfolio of wine assets?
Investing in wine is complicated. Individuals seeking to build a portfolio of wine assets will require advisers, logistical support, and sales channels that greatly complicate the process and limit profits. Publicly traded equities with exposure to wine are largely distribution companies and/or large brands which largely track the overall markets.
How do you differ from other wine funds and what is your edge?
Most existing wine funds are restricted to a classic “buy and hold” strategy of a select group of wines, which are well followed. The result is an efficient market that limits returns. Buy and hold strategies take several years to realize profits.
VV focuses on short term trading strategies that exploit the inefficiencies in the fine wine marketplace and complements a long term strategy when we see great opportunities. VV also has direct access to a select network of fine wine producers through wineries, traders, distributors, collectors and end buyers in major regions of the world.
How is your team differentiated and why is it built to succeed?
VV’s team is made up of wine industry veterans, winery owners, financial market professionals, and technology entrepreneurs -- this combination has allowed VV to create proprietary buying and selling tools that result in higher returns.
Jacob Ner-David of Vino Ventures
Jacob Ner-David of Vino Ventures
Jacob Ner-David is a 20+ year technology & innovation entrepreneur with connectivity in the Israeli and American venture scene. Jacob is the co-founder and CEO of Vinsent, a venture formed to positively disrupt the global wine industry. In 2015 Jacob served as a Senior Advisor to McKinsey & Company, helping to build a new service line focused on early stage companies. He is the Chairman of the award winning Jezreel Valley Winery, which he co-founded in 2011.
Jacob has served as an advisor to Harmony Labs, a NY based incubator focused on big data and media influence. For the past 20 years Jacob has focused on the early stage tech sector, serving as CEO at Ambient (NASDAQ IPO), Delta Three (NASDAQ IPO), NomadIQ (Acquired by NASDAQ listed company), 2bAnwhere, DoubleFusion, and most recently Zula, Inc — along the way creating over $1 Billion in shareholder value.
Contact Jacob: investor@vinoventures.wine