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'IDENTITY INVESTORS' SET TO TRANSFORM WHAT IT MEANS TO INVEST, ACCORDING TO CULT WINE INVESTMENT

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#wine #wines #invest #investing
Published
04/01/2022 by

A major new study by The Future Laboratory on behalf of Cult Wine Investment, The Alternative Wealth Report has found a new generation of Identity Investors are buying comic books, sneakers and wines looking for cultural cache along with healthy returns

  • Alternative assets under management will reach a record $15.6tn by 2024
  • 81% of UHNW cohort are currently investing in alternatives
  • Vin-vestments: Fine wine has increased in value on average 127% in the last 10 years
  • 47% of millennial millionaires have at least 25% of their wealth in cryptocurrencies

Some buy for thrills, some buy to make the world a better place, others are looking for cultural cache; they're young, financially powerful and they're changing the world of investments forever. Cold, data driven investing in abstract, distant markets and burdensome assets is for the traditional investor. The new breed embrace wine, sneakers, NFTs and rare comics and want to feel engaged by more than financial reward unlike their predecessors. It's a profound shift in attitudes, experiences and expectations that's given birth to an entirely new investor phenomenon: the Identity Investor.

This new investor tribe are looking for excitement, interest and a means of expressing their personalities through their financial choices.  They are expanding sectors such as sneaker stocks, NFTs and rare wines. In 2020, Sotheby's sold an autographed 1985 pair of basketball player Michael Jordan's game-worn Air Jordan 1s for a record-breaking $560k. Fine wine has increased in value by 127% on average over the last ten years and nearly 30,000 collectors invested in a piece of digital art for $91.8m.

Identity Investors see themselves as setting cultural agendas as they curate their assets which in turn influence others. Young HNWI are experts in their chosen investment fields and having built their wealth in cool urban environments inevitably become tastemakers.

The Alternative Wealth Report was commissioned by the global leader in fine wine investment, Cult Wine Investment. Two years on from the start of the pandemic, the award-winning company celebrates a record-breaking performance, doubling its assets under management to $320m as Vin-vestments outperformed Gold and the FTSE 100 in 2021.

Chris Sanderson, co-founder, The Future Laboratory said: "This report highlights how – even during a time of instability and economic uncertainty – a buoyantly resilient HNW investor is emerging – one bucking the trend in terms of seeking out alternative asset opportunities, favoring emerging business sectors and deploying the rise of new digital platforms to their best advantage. Unorthodox, bold, and highly entrepreneurial, this new investor mindset is setting the agenda for the decade ahead."

Cult Wine Investment co-founder and CEO Tom Gearing said: "The pandemic has really accelerated the digital transformation of wine as a product, as a category and now as a safe bet asset. In parallel the investor's desire for assets has evolved, imminent financial reward is no longer a dominant motivator, rather it is personal passions driving diversification within asset classes. We're seeing emerging investors come to us through their love of a region or grape, but also with an expectation to experience it as they have other asset classes."

Three dominant alternative assets

Vin-vestments: A stable and resilient investment. Technology is democratizing fine wine enabling individuals to champion regions and look beyond the dominant established sources in France and Italy.  Cult Wine Investment has seen a 23% YoY growth in U.S. investors, with $221k being the average investment by New York clients.

Sneaker Stocks: Known as 'the hype economy' young wealthy people are driving a sneaker and streetwear resale sector set to be worth $30 billion globally. 37% of 18-34 year olds admitted that limited-edition sneaker purchases were motivated by the investment opportunity.

Immaterial Commerce: Metaverse real estate, NFT collectables and cryptocurrencies are volatile but very attractive to wealthy individuals. Almost half of the millionaire millennials questioned in the US have a quarter of their wealth in cryptocurrencies. 

Investment in land in the metaverse reached $425m in 2021, while almost $530m of on-demand generative content stored on the Ethereum blockchain was purchased via the Art Blocks platform in August 2021 alone.

How will the Identity Investor reshape the growth of alternatives

New-generation investors are redefining the alternative sector, bringing fresh attitudes, values and intentions that supersede mere financial growth.  The assets driving this growth are equally diverse in their characterization – tapping into notions of rarity, the cultural zeitgeist or personal interest.

Amid hyped sneaker sales and the emerging allure of NFTs, it's the dual market stability and heritage relevance attached to wine that marks it out as the true alternative stalwart. Beyond providing potential financial returns and being increasingly accessible thanks to the growing sophistication of platforms such as Cult Wine Investment, wine is a stable asset – allowing investors to diversify further in their own interests.

The Alternative Wealth Report, commissioned by Cult Wine Investment was produced by global trends forecaster, The Future Laboratory and is available to view here. When utilizing data from the report, the following accreditation must be used: The Alternative Wealth Report by Cult Wine Investment.

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