- News & Editorial
- Investor Relations
Source: Financial Times
By: John Stimpfig
It’s deeply ironic that the Spanish vintner José Manuel Ortega wasn’t much of a drinker when he first started buying wine in the early 1990s. At the time he was a young investment banker with Goldman Sachs. “In those days, I purchased wine purely for investment purposes,” he admits. “Actually opening, enjoying and appreciating wine wasn’t really on the radar.”
But it was when he moved to Banco Santander in London in 1995 that his investment spree really took off. “Rather than focusing on bordeaux, which everyone else was doing, I collected top-end Spanish wines such as Vega Sicilia, Pesquera and L’Ermita.
“I felt it was a fantastic opportunity. At the time, great Spanish wines weren’t being sold at Sotheby’s and Christie’s and were seriously undervalued. I thought I could cash in.” In all, Ortega spent about £40,000 on Spanish masters such as the sumptuous Vega Sicilia 1968.
To his surprise however, he found himself connecting with his liquid assets in ways that he hadn’t remotely anticipated. He started to enjoy talking to merchants, reading wine magazines and, of course, tasting the stuff. Also, Ortega doesn’t do things by halves. Before too long, his intensive hands-on research took him directly to the bodegas in order to source the wines for his expanding London cellar.
As his interest and love of wine grew, so did his disillusionment with investment banking. Even so, there was no great epiphany from one to the other. “If there was a tipping point, it was visiting the bodegas in situ – talking to winemakers and wine owners and getting practical advice on what to do and where to go. It became enjoyable, exciting and infectious,” he recalls.
In 2000, he took the plunge. Having got to know some leading owners in Argentina and looked at a number of local propositions, he bought a 650-acre tomato farm in Mendoza’s Uco Valley. Even that wasn’t straightforward. “Because of my Spanish accent, the local real estate guy tried to double the advertised price of the property. So I went directly to the owner and made the deal instead.”
Most of his colleagues at Goldman thought he’d lost the plot. “Perhaps they had a point,” says Ortega. “I was only 32 and had a successful career in banking that I was giving up. But you only live life once – there’s no second chance. Moreover, I didn’t want to make wine as a hobby in my 50s. I wanted to do it full-time with my wife and three kids, despite the risks.”
Ortega hired the talented José Spisso as his winemaker. He made his debut vintage in 2001 from bought-in grapes at a rented facility. In the meantime, he replanted the finca with tempranillo and malbec vines before constructing a stunningly futuristic yet totally functional winery, which was completed in 2003. In 2006, he added a tourist centre.
In those early days, it was a daunting learning curve. “The knowledge that others had acquired in 30 years, I had to learn in three,” he says. But his lack of experience hasn’t deterred him from expanding even further afield. In 2002, he bought 60 hectares of vineyards in Spain’s Ribera del Duero and has since started making wine in Chile’s San Antonio and Maule Valleys as well. Today, he exports 20 different wines under his O Fournier label to 45 countries.
Happily, the wines have received plenty of plaudits in the UK including those from Jancis Robinson, Decanter magazine and Oz Clarke. In the US, the Alfa Crux malbec 2004 came 16th in the Wine Enthusiast’s Top 100 wines in 2008. Then in 2009, his O Fournier ribera 2004 was the second-best-rated Spanish wine by Wine Spectator Magazine. And last month his 2008 red picked up the Red Blend Trophy at the 7th Wines of Chile Awards.
Despite all the critical acclaim, the dynamic and irrepressibly likable Ortega still isn’t out of the woods. If anything, he works harder now than he did at Goldmans and is certainly earning significantly less. “I still travel 250 days a year but these days I go coach class rather than business,” he says. “And with three heavily invested projects in three countries, money is going out faster than it is coming in.”
Nonetheless, Ortega remains optimistic about making a good return on his vinous ventures. “We may not be creating short-term cash flow but we are creating net value and net worth. In Argentina, the value of the property is six or seven times more than when we started. So we are liquefied in wine, but not in cash.”
Moreover, his business and banking background have certainly come in handy. “Of course, you need to know about winemaking and terroir. But to succeed commercially, you also need a good grasp of finance, exchange rates and risk. That is why we are in three countries – to diversify our risk.”
About 18 months ago, Bloomberg ran an article about him and quite a few former colleagues got in touch to congratulate him. “Some of them thought I had seen the banking crisis coming and had bailed out beforehand,” says Ortega. “It’s a nice [thought], but I [had done] no such thing.”
But the best calls from former associates are when they tell him how much they have enjoyed his wines. “Recently, an old colleague who has a private equity firm in New York was with a group of Argentine lawyers at a Buenos Aires restaurant. They were all drinking my Alfa Crux malbec and wanted to know where they could get hold of it,” he says. And last September, the same colleague became an investor in the Argentine winery.
Ortega has no regrets that his career has turned full circle, largely thanks to his early forays into wine investment.
What happened to those Spanish masters he invested in? “In fact, I never sold a single one – even though I would have made a handsome profit,” says Ortega. “Some have been drunk and the rest are still in my cellar. But I’ll never sell them now. That’s not what wine is for.”
Jancis Robinson’s column returns next week
Urban Malbec 2008, Uco Valley, Argentina. Stockists: Oddbins, Great Grog, Bottle Apostle, Catchpole & Frogitt, Cuckoo Wines, Hermitage Cellars, Martinez Wines. Prices from £6.99.
Urban Blend (red) 2008, Maule Valley, Chile. Stockists: Great Grog, Hedley Wright Wine Merchants. Prices from £7.49.
2008 Centauri Sauvignon Blanc, Leyda, Chile. Stockists: Bottle Apostle, Bijou Bottles. Prices from £10.50.
Centauri Red Blend 2007, Maule Valley, Chile. Stockists: Bottle Apostle, D Byrne, SA Wines on Line. Prices from £14.99.
Alfa Crux, (red) 2003, Uco Valley, Argentina. Stockists: Waitrose at £22.49.
Spiga (red) 2004, Ribera del Duero, Spain. Stockists: Waitrose D Byrne, Halifax Wine Company. Prices from £22.99.
External Link: Click here for the full article.