A RICH BOUQUET OF RETURNS

By SHAGORIKA EASWAR

Age appears best in four things: Old wood to burn, old wine to drink, old friends to trust and old authors to read.

Francis Bacon’s immortal words capture the essence of fine wine. There are countless other sayings and songs devoted to fine wine that many are familiar with, and most of us know that wine improves with age.

But investing in wine is a concept that needs some explaining.

“It’s not that well-known in Canada and the US,” concedes Atul Tiwari. “But it is well established in Europe and Asia.”

Tiwari is CEO Cult Wines Americas, and heads their operations in Canada, US, the Caribbean and Latin America. He is responsible for the overall strategy and development. 

Introducing this unique asset class to the Americas market was a two-step process, he says. They had to educate people about the benefits of investing in fine wines – diversification, hedge against inflation, low correlation to traditional asset classes, low volatility, and a long-term track record. They also had to share the track record of Cult Wines, which had been around since 2007 and is the largest fine wine investment firm in the world. A leader in the area, with six offices in the world, including Toronto and New York, it has $436 million worth of assets under management, with 1.25 million bottles of wine in its care in the UK. It has 83 countries in its global network of clients.

“We’ve now been around for two years in Canada and people recognize the advantages of investing in fine wines, specially at a time when the equities market and stock market are not performing that well,” says Tiwari. “They see it as a good alternative to stocks and GICs.”

He explains the process. A client’s portfolio of wine is matched with their risk profile and the timeline they are looking at. Fine wine is acquired in Europe, insured and stored in perfect conditions. When the time is right, it is sold and the money reinvested to meet the client’s investment objectives.

“We manage the entire process of acquiring, storing and selling,” says Tiwari. “The main thing with fine wines is that it’s all about supply and demand. Only around five to seven billion dollars worth of fine wine is created every year around the world. Wine that we would consider investment-worthy, investment-grade. And some of that gets consumed! A combination of limited quantity and global demand means the price goes up.”

That’s because fine wine prices are not influenced by factors stock markets are influenced by, explains Tiwari. “The other thing is, in the fine wine market, we don’t have very many giant institutions that hold all the assets. It’s all spread out between investors and collectors. We don’t see a lot of sales for redemption, they don’t usually have to sell to generate cash flow. The market dynamics are different.”

And it’s a hedge against inflation because it’s a physical asset.

In 2021, the returns for fine wines were 21 per cent, in 2022, around 14 per cent. So over the last two years alone, investors would have seen a growth of 35 per cent.

The difference between investing in fine wines and, say, mutual finds is that one actually owns the wine. If you want to take possession, you can.

“In our experience, we sell about 80 per cent, 20 per cent will take possession – in accordance with laws and taxes – because they want to enjoy the wine!”

Hailed by Investment Executive as “having a knack for knowing what’s next”, Tiwari brings extensive investment experience and a passion for wine to his role. As CEO for Vanguard Canada, together with his team, he helped pioneer ETF investing in Canada and grew the company from $3 to $30 billion in assets over seven years.

Prior to that, he held progressively senior positions at BMO Financial including senior vice president of BMO Asset Management, heading up the BMO US mutual fund business in Chicago before going on to lead the charge for BMO to enter the ETF business as the founding President of BMO Exchange Traded Funds.

Tiwari traces his journey from law to finance. After earning his law degree from Osgoode Hall Law School, he began his career in law, working as a corporate and securities lawyer at BMO in London, England. He found the issues that the management team he was part of dealt with, fascinating. Ones that were beyond legal issues. On his return to the head office in Canada, he wanted to explore that side of the business.

“During the acquisition of a company, for instance, the lawyers would give their legal input and then go off to work on other cases. The business team was part of building the business. As a lawyer, I didn’t participate in that, and it was something I thought I would enjoy more. I was lucky that I was able to move from legal to asset management. I found that more fulfilling.”

From that to fine wine investment was a natural progression for Tiwari.

“I enjoy building new businesses, putting a team together, creating something new, it’s a lot of fun! Personally speaking, I am also interested in fine wines. It’s a hobby, I’ve been enjoying and collecting for over two decades. To marry my passions for asset management and for fine wines, it’s a dream.”

Born north of Delhi, Tiwari came to Canada at the age of two.

His father had lost both his parents by the age of 11, but supported by extended family and siblings, he excelled academically, says Tiwari.

“He worked really hard and was accepted at UBC on a scholarship to do his PhD in microbiology. It was the first time he had left India. My mother, sister and I stayed with my nanaji (maternal grandparents) while he saved money to send us our airfare.””

It would be two years before the family was able to join him in Canada. Tiwari’s father did his post-doctoral work in Lincoln, Nebraska, and then returned to Canada, settling in Alberta.

“Just like many other newcomers, my parents faced the challenge of holding on to their traditions, language and culture – right down to the food they ate – while at the same time finding ways to fit into the larger society,” says Tiwari, describing his family’s early years in Canada. “It’s about finding that balance.”

His own childhood was, at times, “difficult” he says, adding that as a kid, some issues seem bigger than they are.

They spoke Hindi at home, and though he picked up English quite easily, it was still a process he had to go through.

“Most of my friends were not South Asian and I had to explain everything. From why we spoke a different language at home to even how to pronounce my name – I forget the number of times I asked my parents why they didn’t name me Bob!”

Parental expectations were also different. While his friends were hanging out, his academically-inclined parents insisted he couldn’t join them until he finished his homework.

“I was learning my Math tables while they were out riding bikes!” he says with a chuckle. “But as you grow up, you realize why they said or did what they did and you love them for it.”

Tiwari’s wife Róisín studied art history and worked for the auction house Ritchies.

“She was head of their fine wines department,” he says with pride. “That’s where we met. Our journey began with fine wines.”

With their shared passion for fine wines, the couple enjoys travelling to France and Italy, meeting and making friends with wine makers. He has also managed a 4,000-bottle cellar of fine Burgundy for the Toronto chapter of the Confrerie des Chevaliers du Tastevin over a five-year period.

They also enjoy cooking together. Róisín, who is Irish, learned to make samosas – from scratch – from Tiwari’s mother. He makes vindaloo for her!

They have two sons, with whom they enjoy many outdoor activities like swimming, tennis, soccer, American football and golf. Chess and reading are other interests shared with their sons.

A firm believer in the value of mentoring, Tiwari spends time with younger professionals and those who reach out to him for guidance.

“They may have great ideas, but are unsure about how to bring them to fruition. I’ve been fortunate to have had great mentors, I understand how important guidance is. I share my experiences and anything I’ve learned on my journey.”

This includes what he describes as the “typical stuff” about working hard and staying focused. Also, being aware of how you approach things.

“To be successful in anything – in life, really – you have to be adaptable. Things change so quickly. You have to be able to look at technology, at trends, and how they impact your professional life. You know how they describe the ‘growth mindset’? It’s all about not resting on your laurels when you feel you have everything, but being inquisitive, learning and applying.”

Asked to describe the most rewarding, the most enjoyable part of his work, Tiwari’s answer is short and simple. “Gosh, it’s all fun!”

Working with a team that shares his passion is exciting and fun, he says.

“Being in a space you are passionate about is really important. All the surveys on happiness point to the importance of being happy where you are.”

“It’s vital that you understand yourself, and are authentic, true to yourself. My parents, like most desi parents, would have been very happy had I chosen to pursue medicine, but that didn’t excite me.

“Remember, you are always going to excel in something you enjoy. Chase your own dream!”

• Grant’s is proud to present this series about people who are making a difference in the community. Represented by PMA Canada (www.pmacanada.com).