Attention: This is a machine-generated transcript. As such, there may be spelling, grammar, and accuracy errors throughout. Thank you for your understanding!

David Leary: [00:00:05] Welcome to The Cloud Accounting Podcast. I'm David Leary. And I'm Blake, Oliver and Blake. We are here at AICPA Sigma Engage 2023 recording live in the earmark and quick fee mobile recording studio. So great to be here. It's very exciting. And we want to do interviews and I do like I always do. I go to the speaker pages of the conference and I just look for people that have some interesting talk or background. So this episode is going to be about wine and art. Unfortunately, the guest that's going to speak about wine, he had a slight issue and he's going to show tomorrow. So we're going to do two parts, but it'll all be in one episode. So if you're listening to this, it's one episode, but for us it'll be two interviews. So we're talking about art, we're talking about art first. We're going to talk about that. And we have Colleen Boyle. She's the managing director and head of national sales and philanthropic strategy of the Fine Art Group. And her talk that she did at Acpa is taxes, tools, tactics, tips for managing art, jewelry and valuable collections. And I was like, oh, this could be I don't know what this is, but it sounds more exciting than, you know, the rest of the sessions. Well, I have been I've been hearing a lot of ads recently about how collecting art is a.

Blake Oliver: [00:01:21] Great way to invest. And there's now these different apps and services that allow you to invest fractionally in art. I'm curious to know if that's something we're going to talk about today, if that's something, Colleen, that you.

David Leary: [00:01:34] And welcome to the show. Colleen, welcome.

Colleen Boyle: [00:01:36] Thank you. And thank you for having me. So let's talk a little bit about let's talk a little bit about the art market. And actually in today's discussion, I'd like to extend beyond art. We like to talk about art with a capital A, and we really see not only just art, but we see art and jewelry and sports memorabilia and other types of asset classes that individuals own or they're looking to enter from the standpoint of an investment, just a balance, a portfolio or to diversify a portfolio. And we're finding that these types of assets tend to be growing in value if acquired appropriately. So the one thing to keep in mind in the art market is that it is an unregulated market. And so it's very, very important that individuals that are looking to acquire not only just art, but maybe collector cars or wine or jewelry or men's luxury watches or even Hermes handbags that they become educated and that they undertake due diligence. If you think about buying a piece of real estate, think of everything that you do prior to making the purchase. You have inspections. You look at the comparables and the marketplace to understand whether or not you're getting a good value. You undertake a series of due diligence practices.

David Leary: [00:03:06] Professional to help you on the purchase.

Colleen Boyle: [00:03:08] I hire professionals in all different areas. The same should apply to anyone who's looking to acquire these assets for investment. A lot of people will acquire these assets just for sheer pleasure as maybe they like a specific esthetic and the color schemes match the colors in their living room. That's a different approach than acquiring for investment. So if you're talking about investment, you really want to make sure that you do execute a certain set of due diligence practices, because not only is it unregulated, there are also a lot of fakes in the marketplace, and it's something that is very, very prevalent that is a buyer beware scenario.

Blake Oliver: [00:03:59] So I'm a CPA and I've got clients that are interested, high net worth individuals who are interested in investor in wine, rare wines or musical instruments or artworks. What can I do? You know, I'm not an art expert. I'm not, you know, an expert at these things, like how do I protect my clients? What's the best way to do that?

Colleen Boyle: [00:04:23] So the first thing is to really understand if your client is working with a professional, just like your client has hired you as the CPA to manage their tax situation. The same applies in these asset classes to make sure that the client is working with a professional who understands the market, who understands the mission of the client, who understands also really talking through not only just on the acquisition side, but what is really the final potential disposition, because all collectors are different. So in some cases some collectors may be starting collections really for enjoyment they've always wanted to own a few for. Drive around the tracks. Go to the car shows. It's really experiential. It's a passion. And then they realize, Oh, and I want to also own some Porsches. Oh, okay. Now I want to buy a McLaren. And that's usually what happens is you start with 1 or 2, and then your passion and your knowledge increases and you continue and you build a collection, but you want to build wisely. So at the end of the day, if you have a collection of 20 cars, what are you going to do from the standpoint of ultimate disposition? Do you have heirs that are interested in those vehicles? Are you thinking about possibly selling eventually? Have they appreciated in value? And as a result, you're going to have a capital gains scenario. The same would apply to artwork. A lot of people are looking now to enter into really the postwar and contemporary space, which is where we're seeing most of the activity. And it's global. It's global demand. We're finding, again, if clients acquire the wisely and they don't overpay, which most clients will tend to pay premium because they're not educated and they're not going through the due diligence practice, then it's harder to actually increase in value if you're already paying at a premium at your cost basis.

David Leary: [00:06:25] What's the. So one of the objectives in your talk was the difference between price and value. Can you explain that? Absolutely.

Colleen Boyle: [00:06:32] So if you think about the price of something compared to the value of something, so the price is what somebody is willing to pay. So in an unregulated market, what does that mean? That means the price can be set at any benchmark. Okay. If you go to open market as an auction, the strategy there is you start with a low estimate. It only takes two bidders to bid against each other to drive that price up. Just because something sells for a significant amount of money doesn't necessarily mean that's what it's worth. It just means two people really wanted it and in some cases will pay more than market to get it. So that's the challenge and that's where the due diligence comes in because it can get quite competitive if you're in a bidding situation at auction. So oftentimes when we're working with clients, we'll bid on behalf of the client, we'll set the parameters, we'll recommend. You really shouldn't be paying above this threshold for this piece of artwork or for this piece of jewelry if you want to stay within the market.

David Leary: [00:07:32] So so with the value, the value price, not the price, the emotional price, the value price is something that you kind of level set of. Like I crossed a big enough sample set. Here's probably what it would go for versus the two people that are in a bidding. Exactly. Got it.

Colleen Boyle: [00:07:46] Exactly.

Blake Oliver: [00:07:47] And you're acting as an intermediary to take a little bit of the pressure off, too.

Colleen Boyle: [00:07:53] Exactly. Exactly. I mean, it's again, it's emotional. I don't know if you've ever been to an auction or have seen, you know, the bidding process.

Blake Oliver: [00:08:02] Not a fine art auction, but like a school auction, you know, And it's.

David Leary: [00:08:05] There's art.

Blake Oliver: [00:08:06] There. There's art maybe by children, but it can be emotional. Exactly. And yeah, you might overpay for for something. Yes, it can happen. I assume the same principles are at work.

Colleen Boyle: [00:08:18] Yeah. I mean, at the end of the day, it really has to do with the intention of the buyer. And if the buyer's intention is to buy for investment, it's a different set of strategies than just buying because it's something that you're going to enjoy. So a couple of things to think about when you're buying for investment. Obviously not overpaying, not paying premium, that's the first. Second is just even the strategy of how is it structured. Are you going to set up an LLC or are you going to position the say, for example, a lot of artwork is stored in Delaware from the standpoint of a of a tax benefit.

Blake Oliver: [00:08:50] And that's a question I want to dig into is like I mean, some of these artworks are incredibly valuable. Do you set up an LLC for each one? Do you collect them like in a group? Yes.

Colleen Boyle: [00:09:01] So it depends on it really depends on the overall financial structure of the individual. I am not a tax specialist, but what we tend to see with our clients, usually they'll have at least one, if not more than one LLC. It could be it could be differentiated by the type of artwork. So maybe all the postwar and contemporary contemporaries in one LLC and maybe the American artwork is in another LLC, it could be by period of acquisition. It just depends on how the LLCs are structured, and it's really up to the client and up to the tax specialist to figure out the best structure from a tax efficiency perspective. But we are seeing from an investment perspective, people storing more than hanging on the wall. So it tends to oftentimes go into storage. We'll sit in storage or possibly go on exhibition. If a piece can get in a significant exhibition, sometimes that can actually enhance the provenance of a piece, the history of the piece, the storyline of the piece. That's always helpful as far as thinking of an overall strategy on. Changing and improving the value of an object.

David Leary: [00:10:07] And so what does your firm actually do then for clients? Do you you said you go to auctions and you bid. Do you do the research? Do you verify and issue certificates like we guarantee this is an authentic item or is it all of the above?

Colleen Boyle: [00:10:18] Like so the fine art group, we are the largest independent global firm of appraisers and advisors that specialize in non cash passion assets that include art, jewelry, cars, coins, firearms, wine. I mean, the list is fairly significant. What clients own. We are truly the best in class. Our specialists are all very knowledgeable, many of them former Sotheby's and Christie's specialists. And basically what we bring to the client is a fiduciary perspective. So we have five primary services that we're able to offer to clients. We are we do a lot of valuations and we can help a client, whether it's an IRS valuation that they might need, maybe they're donating an object or there's an estate settlement, or maybe they just want to have objects insured from a risk management perspective to make sure that they're covered in case anything happens to the object. We're very active in the what we call advisory space, helping clients to build collections. Often, oftentimes clients are not knowledgeable about this space. We bring a lot of education to the process, really understand the client's interests, their mission. Are there multiple family members that might be involved in the process and helping them to build a collection wisely from an investment, usually an investment perspective. And that's when we'll go to bid on behalf of the client. But we do the same same thing on the sell side.

Colleen Boyle: [00:11:50] So when it comes to selling, many people do not know how to sell a collection. We do the same thing from the standpoint is positioning ourselves as the fiduciary and making sure that the object is sold or objects are sold at the most appropriate venue. At the right estimates. We negotiate all the fees. We make sure it's positioned correctly online in the catalog. We also look at the market conditions. Is this the best time to sell? Should it sell in New York? Should it sell in Geneva? Should it sell in Hong Kong? Should it sell in London? All of those factors make a difference. And then we also are very involved with lending. So we have a lending platform for art and jewelry for people who are looking to collateralize their collections and need some liquidity or maybe want to buy more objects, they can leverage their existing collection. And then we also have investment opportunities where we'll help clients to build from the standpoint of investments, whether it's a group of people coming together because they want to buy a couple of pieces of artwork set up the LLC, hold it for 3 to 5 years and then monetize it. There's all different structures that are involved. From the standpoint of of investment.

Blake Oliver: [00:13:02] How did you get into this world of, you know, I'm I got to say, I'm like picturing like James Bond, you know, it's like that kind of like.

David Leary: [00:13:12] There's no podcasters hanging around, people.

Blake Oliver: [00:13:14] With monocles, you know, like fine wines, Like how did you get into this world of, you know, this rarefied world of art?

Colleen Boyle: [00:13:21] And so it's an interesting. So my background is actually finance. So I studied economics undergrad at the College of William and Mary, and I was in the financial field for many, many years. I had the opportunity to move to Paris, France, and I had the opportunity to pursue my passion, which was art and collectibles. So I got a degree from Christie's in Paris. I speak French, and then I was looking to be able to blend my passion with my financial background, and that is how I entered into this particular arena. So I started off as an appraiser and then moved into more of a business development role and now working really doing a lot more in the philanthropic space. So what we're finding and you'll see if you watch the auctions more and more high net worth and ultra high net worth clients, they're very philanthropic. They want to give back and they're using these types of assets as a means to do so. You're going to see more and more single owner sales with all the proceeds either going to the foundation, being allocated out to various charities or directly being allocated to charities of choice. And so we're getting involved with that process, working with the multigenerational families, particularly next gen who may not be interested in Grandma's jewelry, but might have a specific cause they want to support. So how can they use Grandma's jewelry to support that cause? And we work to help them figure out that strategy, that approach the sales strategy.

David Leary: [00:14:45] And does that include strategies around like capital gains and taxes and all of these steps?

Colleen Boyle: [00:14:49] So we're not tax specialists, but we we do valuations. So if we understand what the cost basis is, we're able to provide a fair market valuation that would indicate whether or not there's any type of capital gains situation. And that's really going to direct the strategy. You know, from the standpoint of is there a capital gains strategy that you might want to execute? Plan A If there's no capital gains situation, then you might want to execute Plan B? It does help. I mean, obviously, most clients are concerned about tax issues and minimizing any type of tax situation. So that's always part of the equation. But we work with clients, advisors, tax specialists, tax attorneys, wealth advisors. Really it's a collaborative approach. We're coming in as the specialist in the area of these passion assets to provide information on value and the current market situation.

Blake Oliver: [00:15:37] Do you have a favorite type of passion asset personally?

Colleen Boyle: [00:15:42] Oh, I see so much. I'd have to say if I had to pick two. I really love the art space. I'm enamored not only by artists who, you know, who have passed and are substantially art world, but also current artists who are who are producing and the messaging that they're providing. And I love the visual imagery, but I also am passionate about about wine, which is why I wanted to meet the wine specialist. I loved the the burgundies. I'm a I'm a Burgundy, white and red. Well, Pinot, Pinot noir and Chardonnay fan. So particularly living in France for seven years, I got the chance to spend a lot of time. Learning about wine and if.

David Leary: [00:16:23] You your firm start getting into know all these nfts and digital assets and digital collectibles like is that like is it a scam? Is it real? Are people were paying for that? Is it the market? Is it too variable? Like what What are your what's your $0.02 on that?

Colleen Boyle: [00:16:39] So you know, the NFT market particularly a year ago was really the talk because you saw these astronomical results at auction and that drives individuals to want to enter a marketplace when all of a sudden you start seeing significant returns. Nfts are very similar to any other type of speculative investment. And that's what it is. It's speculative. So what do you need to be aware of? So first of all, how does the IRS categorize an NFT? Is it a collectible? Is it a security? Again, how is that regulated from the standpoint of ownership? Who actually owns the image? And if you actually look at legal cases, which there are a lot of legal issues right now, a lot of the legal issues are around who owns that particular image. So that's another thing you have to keep in mind. If you take a look statistically at the average value of an NFT and the whole time of an NFT, it's more of a flipped product, if that makes sense. You're in, you're out. You don't hold on to it necessarily for a very long time. And the space that is probably going to be the most interesting in the NFT arena is looking at artists. So definitely some of the living artists have entered into that space.

Colleen Boyle: [00:18:02] It's very interesting to watch as well as your athletes and celebrities. That would be the other space to watch in the NFT market. It's not necessarily going away. If anything, it has definitely been subdued, but it's it's something to be aware of. And like any other asset we always recommend, even in our space, we always recommend clients considering no more than, say, 7 to 10% of their overall portfolio in that particular asset category. The same would apply to anything digital. You just don't want to be too heavy in anything. And if you're a speculative investor, it's fine knowing that you can possibly make some money, but also knowing you could possibly not. So as long as you go in with that mindset, you're fine. And I'd say the same thing on the investment side. You know, when you're looking at art or jewelry or wine or cars, again, if you if you have the right guidance, you can do well. But that's not always the case. Markets change, tastes change, Global economies change, desires change. So you really have to be aware of those changes and understand when the exit strategy should apply.

David Leary: [00:19:18] And is this just a game for the ultra wealthy and the ultra rich, or is there a place here for accountants who may not have the budget but have an interest in collecting something that could be valuable?

Colleen Boyle: [00:19:31] Absolutely. I mean, that's the beauty of this space. If you look at again, across the board, all different asset class categories, you'll find you can definitely enter. You don't need to spend $1 million in order for it to be an investment. We find in the art space looking at what we call the multiples, so lithographs that have limited editions, that's a great way. A lot of times collectors will start in that space. And again, if you're buying Smart, that can appreciate over time. And then oftentimes that could get monetized and you move up into the category. The same would apply to other asset classes as well. You know, you find your entry mark, the return won't be obviously as grand as buying something at a higher value, which is why we're seeing a little bit more collaboration around acquisition where you'll see maybe three people set up, you know, a joint scenario where they'll go and collaboratively to acquire something that makes sense.

David Leary: [00:20:33] Well, Colleen, thank you for joining us here. It's I love having things we don't know anything about. It's nice not to talk about running an accounting firm sometimes or accounting and tax and learning about fine art. It's a it's a whole new world for us. And I do appreciate you joining us on the Cloud Accounting podcast today.

Colleen Boyle: [00:20:49] Well, thank you.

Blake Oliver: [00:20:50] And if our listeners want to follow you and learn more about what you and your firm do, where should they go?

Colleen Boyle: [00:20:56] Sure. www.fineartgroup.com.

Blake Oliver: [00:21:00] Com. All right. Thank you so much!

David Leary: [00:21:02] Thanks, Colleen.

Colleen Boyle: [00:21:02] All right. Thank you.

David Leary: [00:21:05] Blake, remember yesterday we recorded the first half of this podcast and it was about art. And my promise was I wanted art and wine. Well.

Blake Oliver: [00:21:13] The best combination.

David Leary: [00:21:14] The best combination. Now we get to talk about wine and we have a tall. I'm going to mess up your last name. Sorry, I nailed it. Perfect. Thank you. He's a CEO of Cult Wines of America. So when I if I'm going to scroll through a speaker page, I see cult wines America's. They're coming out on the podcast.

Blake Oliver: [00:21:30] Cult wines. We have discussed how accounting firms can sometimes be like cults. So this is an accounting podcast. Cult wines. What's the name for? Like, why? Why call it cult wines? Nice.

Atul Tiwari: [00:21:42] Nice tie in. Thank you. And thanks for having me. Right. Well, we call ourselves cult Wines Investments. As you know, there are some iconic wines and they're referred to as cult wines. So if you if you're a fan of California wines, you know, you got Harlan, you've got Screaming Eagle. Those would be called cult wines. And so that's the genesis of our name.

Blake Oliver: [00:22:05] So people collect these wines. They're obsessed with these wines. I mean, like, what vintages are we talking about here when we talk about California cult wines?

Atul Tiwari: [00:22:14] Well, yeah, So we're we're essentially an asset manager. So we're the world's largest fine wine asset manager. We have about $360 million in assets under management. And so when you.

David Leary: [00:22:28] Say assets are like physical, like you store them like physical bottles of wine.

Atul Tiwari: [00:22:33] Correct? They are physical. And number, again, $360 million worth. So these are these are physical. Trying to wrap my.

David Leary: [00:22:41] Head around that number.

Blake Oliver: [00:22:43] How much is $360 million worth of wine? Like how much space does that take up?

Atul Tiwari: [00:22:48] It's about a million and a half bottles. And we have storage facilities with a third party in the UK called London City Bond. And there we have 24,000ft². And we've just taken more in an old World War two bomb shelter that London City bond is converting to wine storage called Drakelow tunnels. So we have room to expand by about a factor of 5 or 6 from that 25,000ft².

Blake Oliver: [00:23:16] So you buy the wine, you ship it all to London and you store it in a bomb shelter.

Atul Tiwari: [00:23:22] Yeah, basically the the wine. Actually, when you look at fine wine investing, traditionally it has been a European thing. And so our allocation to clients, the benchmark allocation, it's about 80% French wines, 10% Italian wines, and then the remaining 10% gets split up amongst the rest of the world, including the United States. And so most of our wine is acquired in Europe and shipped to inbound warehousing through London City bond in the UK. And that also allows us access to the deepest and most liquid market when we go to exit positions.

Blake Oliver: [00:24:02] What is in bond mean?

Atul Tiwari: [00:24:03] So in bond is a system whereby you can move goods within essentially the EU and the UK from location to location without having to pay the VAT tax. So accountants will be very familiar with that 20%. So if you purchase wine in France, you can move it from France to an inbound warehouse in the UK without having to pay the 20% VAT tax on that purchase. So long as the wine stays in bond, it does not attract that VAT tax. When it's taken out, it attracts that tax in it and the tax gets paid by whomever takes it out of the storage.

Blake Oliver: [00:24:44] And does it come out of storage? How long do you hold on to this wine?

Atul Tiwari: [00:24:48] It it will. So because of the way our client accounts are structured, if you came on board with us, you would get a what we call a segregated separately managed account, a fine wine, and you own it.

Blake Oliver: [00:25:03] So under specific bottles or cases.

Atul Tiwari: [00:25:06] Cases, Yep. And so under UK law it is segregated and ring fenced and it's identified as your wine, so you own it. We actively manage that for you. But at any time if you said, hey, that 2000, that case of 2000 Lafite has been in storage for a while, I'd rather take possession of it and enjoy it with my friends and family, you know, don't sell it. I'll take it and we'll help you take delivery of it.

Blake Oliver: [00:25:34] So sorry, I just got to dig into this more. David.

David Leary: [00:25:36] I'm trying to conceptually, I'm going, I'm confused about or whatever. So I'm filthy rich and I have artwork that I don't look at because that kind of stays in wine, in a warehouse, in a warehouse. And I got wine. I'm not drinking. That stays in a bomb shelter. I'm like, like, what's the point of being rich? I don't know. I'm trying to wrap my head around this.

Blake Oliver: [00:25:55] Well, so you said people do consume it. Do you have a breakdown of how many are doing it just purely as an investment versus how many are?

Atul Tiwari: [00:26:03] About 85% of our wine is investment wine. So we will sell that for clients and reinvest proceeds. Or if they take money off the table, they can do that. About 15% clients will say, don't sell it. I want to enjoy that and we'll help them get possession of it.

Blake Oliver: [00:26:19] And when you sell it, how do you do that? Do you have like a website? Do you put it up for auction? Like, how does it get offloaded?

Atul Tiwari: [00:26:26] Yeah. So we have 3300 clients around the world. And so our first thing is we've got a closed system. So if you were overweight Bordeaux and somebody was underweight Bordeaux, you know, we can match the trade that way. Secondly, we have a broad network of traders, commodity traders in Hong Kong. We have a network of merchants that we've worked with that have been around for hundreds of years that we go to, as well as what they call the the on trade, which would be restaurants and others. If, you know, if if the wine is iconic enough. The other thing we will do, if none of those are suitable, we will sell the wine through what is essentially a stock exchange for fine wine called Live Oaks. And Live Oaks was created in London in the year 2000. There's about 600 professional members, so individuals can't join. We're members, but professionals around the world who are buying and selling these wines all day, every day. So they're making a market in the wine so we can go there to to sell. We generally do not sell at auction because the commission fees are too high. They could be 20%, 30%, and that eats into returns. Got it.

Blake Oliver: [00:27:48] So do you have do you partner with CPAs such as myself who are advisors to our clients or, you know, investment advisors? Like how do you acquire how do you get your customers?

Atul Tiwari: [00:28:01] Yeah, for the most part, the company has been built on a DTC basis and so it's very hands on. It's very 1 to 1. And at certain levels of investment you get a dedicated portfolio manager.

Blake Oliver: [00:28:15] Do you have minimums?

Atul Tiwari: [00:28:16] We do. So the minimum investment is $10,000. Okay. At $35,000, you get a portfolio manager. So at that point, you have a lot more 1.

Blake Oliver: [00:28:27] To 1 relationship.

David Leary: [00:28:28] So is it a im? I'm the one who's saying, I'd like you to go acquire these wines or I'm just giving you ten grand. You're just going and getting me a portfolio?

Atul Tiwari: [00:28:35] Yeah, for the most part it's the latter. Where just like any other asset manager, once a prospective investor is comfortable with who we are, our track record, our ability to perform and match the clients goals to their objectives, they'll essentially usually say here, over to you, use your discretion and please manage it as you usually do.

Blake Oliver: [00:29:04] What's the return on this type of investment? Historically, I know you can't predict a future return, but I imagine it must be pretty good if you've amassed 300 and something million of assets.

Atul Tiwari: [00:29:16] Yes. So we've been in business since 2007, so we've got a 15 ish year track record, 16 coming up. So returns have been solid, obviously with variability from year to year. But essentially a client would expect historically 10 to 12% annual returns. And to give you an indication over the last couple of years, our average return last year was 13% and the year before was about 17%.

Blake Oliver: [00:29:50] That's not too.

Atul Tiwari: [00:29:51] Shabby. Not bad compared to the S&P last year, which was down 18%. So it was a year where we, you know, fine wine did what it was supposed to do.

Blake Oliver: [00:30:00] And how does cult wines earn its fee?

Atul Tiwari: [00:30:02] So we charge a management fee and percentage percentage correct. And depending on what tier your account level is at it, it it ratchets down. So when you come in, it's 2.95% and at the highest level it's 2%. So.

David Leary: [00:30:19] So, so what's your background? You're not an accountant. I'm not. You're a lawyer. I am. Was a lawyer. Now, are you like. Did you get in this because you were a wine lover or are you a business person like.

Atul Tiwari: [00:30:30] Yeah. So I'm a former lawyer, I like to say a reformed lawyer and was was in the corporate and securities world. From there, I moved on to asset management and was an executive with a large Canadian global bank. And from there I was recruited by Vanguard to start up Vanguard Investments in Canada. They were looking to start in Canada and I had a lot of experience with ETFs, so I did that for almost eight years. And then after being at Vanguard, I mean, the natural place to go would be fine wine asset management. I mean, it just goes together so well, doesn't it? But all kidding aside, I do. I have a passion for fine wine. I knew it was a recognized asset class in Europe and Asia, not so much in North America. So with my business partner, we did some research, built a business plan. Found out Collins was the best in the world, and we approached them about growing the business throughout the Americas. So that's how it all worked out. My wife is also pretty passionate about wine and ran the fine wine department of Ritchies Auction House. So as a as a family, I can say family because we have our boys knows wine. They're not old enough to drink it yet, but we'll have them, knows it. And you know, invariably they'll say peaches. Our younger one will say dinosaur bones because he likes dinosaurs. And, you know, sometimes he's right. Yeah.

David Leary: [00:32:08] It's amazing. So with how do you reconcile people? Because I think wine people are very obsessive about wine. Like I've seen some of these movies and documentaries and like when people are just like, I just want to buy it and treat it as an asset, I'm never going to actually appreciate it. Is that like emotionally drive you a little crazy?

Atul Tiwari: [00:32:26] Yeah, that's a very good question, David. You know, it is a bit there is some controversy around it, as you say, amongst, you know, some fine wine aficionados. Now, I would consider myself generally to be one of those as well. So for me, I separate two parts of my brain. One is the the enjoyment of drinking wine part and the other is my investing part. And so, you know, we do have a cellar ourselves. We enjoy fine wine. Obviously. I have an account at Cult Wines and I like looking at the returns on that. So, you know, for me, I'm able to separate the two. But, you know, to be honest, there are a few friends of mine from the Confrérie de Chevalier. It's the Burgundy wine group of which I'm a member who would say, you know, gosh, I'd never buy wine for an investment. It's meant for me to drink or my friends and family to drink. So, you know, I think you can do both.

David Leary: [00:33:28] So Blake and I live in the desert. We're both in Arizona. And now let's say it's not really a great place for me to store my wines. How do I get them into the cellar? In England?

Blake Oliver: [00:33:37] The problem you have is a wine lover in Arizona is you can only buy wine a few months out of the year because if you try to ship it right, it gets ruined in transit.

Atul Tiwari: [00:33:44] Yes. And that is an issue. So we'll do that for you. So back to our allocation again with arguably a little over 90% being European wines, they wouldn't have far to travel any sort of Californian or Chilean wines. We would only ship in appropriate weather with refrigeration to the warehouses in London. So that's that's how we would do it. We don't store a lot of wine in the US and there's a reason for that. And that is, again, as I mentioned, most of the wine world in terms of investments, the liquidity is through the London markets. Traditionally Hong Kong's a number two market.

Blake Oliver: [00:34:35] Has that changed with Brexit at all?

Atul Tiwari: [00:34:38] It hasn't really changed much, no. And there was a period where it became a lot more difficult with forms and getting the transportation organized when they were figuring all that out during the beginning of Brexit, let's call it. But it's a lot smoother now. And of course that also coincided with with the pandemic. And so there were supply chain issues. There were all these forms that people didn't know what to do with. And so there was a bit of a bottleneck on transport, but that's been cleared now.

David Leary: [00:35:09] So if let's say there's a senior firm partners that are making a lot of money with their big accounting firm and they want to start investing in wines, like how do they do this? What's the first step?

Atul Tiwari: [00:35:18] Contact us. And so you can go to our website called wines.com. You can request a consultation and we'll set up a meeting and we can talk about your objectives and how we can help you. And then we we take it from there. Amazing.

David Leary: [00:35:37] Thank you very much for joining us. It's very interesting. Yeah.

Atul Tiwari: [00:35:39] Thank you. Thank you. Thanks for having me. David Blake. It was nice to chat.