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Fine wine investment Q&A with Daniel Walker of OenoFuture

By LLM Reporters on 17th April 2019

Daniel Walker is the head of the investment arm at OenoFuture, who were recently named as the best fine wine investment company in Europe. He was immediately identified as a precocious talent with a knack for analysing markets and utilising their unpredictable nature. It is this innate ability that has enabled OenoFuture to solidify their reputation as the “go to company” of the market and demonstrate exemplary returns over the previous 12 months.

We sat down with Daniel and discussed everything from his love of quality wine to his predictions for the fine wine market.

1. Tell us about your background before you joined OenoFuture.

My career began modestly working for trading companies and as I climbed the proverbial ladder in that world I soon realised that the world of stocks and shares didn’t fully align with my core values. Following a move into the commodities sector and also working with a few private hedge funds which offered greater scope for growth and a more sincere approach, I joined a large company in London where I headed up the investment arm which set them on a path of succsess.

After performing exceptionally and generating market beating returns within this company, it was the right moment to take my career in a new direction, take on a new challenge and pursue my love of wine. I knew this was a comparatively safe and profitable market because the fine wine sector has the key attributes needed for successful investment. Wine is asset-backed, experiences significant global demand, and is consumed, meaning that it is a safe, secure and relatively straightforward market where clients can generate significant returns.

2. How did you become involved with OenoFuture?

My involvement with OenoFuture really began in a wine bar where I was drinking with colleagues after work in the financial district. It was here that I realised the potential in the wine market and I was later fortuitously put in touch with OenoFuture founder Daniel Carnio through a mutual friend. After many conversations we both reached the happy conclusion that with Daniel’s wine expertise and my financial acumen we could build a formidable alliance.

Daniel Carnio took the time to convince me that the wine market was something I could get to grips with given my lack of previous exposure to fine wine. Above all it was Daniel’s infectious passion for the fine wine world and OenoFuture’s modus operandi to select top quality wines which are still under the radar for many mainstream investors which opened my eyes to the incredible possibilities in this market.

3. So, Daniel, why did you choose to get involved in the fine wine market?

What excites and interests me about wine in professional terms is its incredible investment potential. Fine wine is an asset-backed commodity, production is often severely limited, and demand is continually on the rise across the globe. This means that fine wine represents a textbook investment opportunity, and indeed fine wine has provided solid growth for well over a century. According to the luxury investment index Knight Frank, the price of fine wine has risen by an average of 25% in the past 12 months, beating oil, property and gold.

4. What impact have you had on OenoFuture to date?

One of the key aspects I wanted to bring to OenoFuture was a core financial element. I believe that creating wine is an artistic pursuit and the human element is crucial, but the basic principles of financial analysis that I have honed during my career to date are extremely relevant to the fine wine world. By applying these universal financial principles to the wine market and making use of my existing expertise I can help the company to predict and adapt to marketplace downturns as well as assisting clients to maximise the benefits of strong periods of growth.

The key impacts I have made so far are ensuring OenoFuture has bulletproof financial core and bringing a thorough knowledge and understanding of markets more generally to the table to allow us to take our client support to the highest level. As a complement to OenoFuture founder Daniel Carnio’s genius in selecting high potential wines, I believe my contributions allow us to offer our clients market-leading advice on how to mitigate risk and understand market performance to reap rich rewards.

5. What do you foresee for the future of the wine market?

I strongly believe that OenoFuture is already operating where the rest of the wine market will be in four or five years. Following the Bordeaux slump of 2012 when the market became oversaturated and Chinese investors began to step away from these wines, the trend has gone to top quality esoteric wines which have an irresistible appeal for discerning fine wine investors.

A key benefit of these wines is that at the moment these wines are extremely well-priced and we have positioned ourselves to be in a good place in the next four to five years. By looking ahead to how the market will develop, we are now leading the market by focusing on these rising stars of the fine wine investment world.

As a final point, it’s hard to speak about the future without mentioning Brexit! The wine market has always provided stability in times of economic fragility. Since records began wine has provided a better return on investment than 98% of other financial instruments. When Brexit was announced sterling quickly fell to a 30-year low, whereas the wine market saw a spike of 25%. Although it is too early to predict exactly how Brexit will affect the markets, I am confident that the fine wine market represents a top option for investors looking to diversify and protect their assets.

6. What does the future of OenoFuture look like?

What we have seen over the past few years is that investors are becoming far more sophisticated with their investment choices. There has been a diversification away from traditional blue chip investment options thanks to companies like OenoFuture who have unique relationships with top wineries and are able to source remarkable investment grade wines. We are one of the first wine investment companies to specialise in lesser-known regions like Northern Italy and California which have performed extremely well since Brexit. Interestingly, these regions have proved remarkably resilient to the economic uncertainty surrounding Brexit and Californian wines in particular have risen by 48% since Brexit was announced.

7. And finally, tell us about one of your most memorable wine experiences.

A recent standout experience was when OenoFuture was selected as the Fine Wine Investment Firm of the Year for 2019 at the The European Global Business & Finance Awards. This was particularly significant to me as my work heading up the investment arm and the strength of OenoFuture’s financial expertise was a significant factor in winning this accolade. To celebrate the win in the office we opened a bottle of Artadi Carretil which was showing incredibly well. It was such an honour to be enjoying that remarkable wine and sharing the experience with the rest of the OenoFuture team who worked so hard to win that prestigious award. I’m looking forward to many more such wins in the future so we can taste our way through other great wines on our books!