Case Study
How Vint unlocked more than $500k in IRA capital with Alto*
With investment durations typically spanning several years, securitized wine and self-directed IRAs are a perfect pairing.
Relationship Established
IRA Capital Invested
Investments from IRAs
Company
Vint is making the wine and spirits market investable with the first transparent, SEC-qualified trading platform.
Website
Headquarters
Richmond, VA
Industry
Wine and spirits
For centuries, the ultra-wealthy have paid high premiums for fine wines. With a finite supply and growing concern that climate change could negatively impact future yields, demand for highly desirable wines has only increased, leading savvy investors to recognize its potential for returns even as more traditional investments falter.
However, there was just one problem: Investing in wine has historically been anything but transparent.
“Basically, all you could do is send $10,000 to somebody in the UK who would buy bottles."
Then you might receive a list of what you owned a few weeks later.
For Vint’s founders, this solution wasn’t good enough. Not only was the investment process opaque, from a more technical standpoint, it wasn’t a true financial product—meaning it wasn’t regulated.
Like Alto—which streamlined the process of investing with a self-directed IRA—Vint’s founders saw an opportunity to make wine investing more accessible. But first, they would have to work with the SEC and FINRA to understand the regulatory environment.
Key to receiving SEC approval was securitization. Securitization is the process of taking an illiquid asset or group of assets and, through financial engineering, transforming it (or them) into an investable security. Effectively, Vint pulls together a collection of wine, whiskey, or other highly collectible spirit, and then securitizes it by creating an investable company that holds these assets. Following SEC qualification, Vint offers shares to investors rather than actual, physical bottles.
Then, when Vint believes market conditions are right—typically within one and seven years of offering the investment opportunity—the collection is sold and the proceeds distributed among investors.
Pairing Self-Directed IRAs and Securities
Founded in 2019, Vint was the first SEC-qualified wine and spirits trading platform, bringing much needed transparency to an asset class that was anything but. Now approaching 70 collections closed with a loyal fanbase, Vint takes pride in giving people the ability to invest in something they’re truly passionate about.
It’s a mission Alto shares by giving everyone the opportunity to lean on their expertise and invest in things they know and love.
“Alto helped us explore IRA capital, raising more than a half million dollars in the process.”
Now, those well-versed in IRA prohibited transactions rules might wonder how this is possible given that you can’t hold collectibles such as alcoholic beverages in an IRA. The answer, again, lies in Vint’s mission to bring transparency to an asset class that was opaque at best.
While it’s true that investors can’t hold collectibles in an IRA, holding securitized collectibles in an IRA is allowed. This rule applies to securitized wines and spirits the exact same way it does to securitized art and luxury goods, to name a couple of other examples.
But beyond securitization, there’s another factor contributing to why opportunities such as these haven’t been available in individual retirement accounts: While self-directed IRAs have been around as long as IRAs themselves, they—like investing in wine—weren’t always so easy to access.
That is, until Alto.
A Shared Mission of Accessibility and Transparency
Just as you used to need tens of thousands of dollars to invest in wine via a murky and manual process, investing with a self-directed IRA used to be frustrating, time-consuming, and often prohibitively expensive.
Alto changed that by replacing the once paper- and people-intensive process with an end-to-end, tech-forward solution.
In doing so, Alto opened the doors for alternative investment funds, founders, and other issuers to accept IRA capital while simultaneously empowering millions of Americans to achieve greater portfolio diversification by enabling them to invest in alternatives using what is for many their largest source of investable assets—their retirement dollars.
“Once we understood the whole self-directed IRA, this ability to use alts, we thought the alignment was tremendous. It’s a perfectly aligned capital base.”
There’s also another reason IRA funds and alternative assets like wine are a perfect pairing… Ignoring the obvious pun, assets such as wine are typically illiquid. As mentioned previously, the typical holding period for investments in wine and other highly desirable spirits is anywhere from one to seven years.
Considering IRA holders can only take distributions without penalty beginning six months after turning 59—and in the case of a Roth IRA, five years after opening their account—IRAs are a perfect vehicle for alternatives.
Investors realize it, too: Since first working with Alto in 2021, Alto IRA accounts have invested more than half a million dollars in Vint offerings—a figure that will undoubtedly continue to grow as more and more investors seek out investments that aren’t highly correlated with traditional assets like stocks, bonds, and mutual funds.
And while other self-directed IRAs have come along, Alto’s cost-effective, straightforward platform has IRA clients coming back to Vint for more.
“Alto’s definitely the most affordable option.”
In addition to providing a simple solution for accepting IRA capital, Vint did their own annual cost assessment of various custodians, and Alto ranked at the top.
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*Alto does not represent, warrant, or otherwise guarantee the success of an offering on its platform. Issuers are solely responsible for engaging investors and raising capital for offerings uploaded to the Alto platform. Alto will not recommend or otherwise market an offering to its clients.