Investing in Wineries: San Giovanni Case Study
Yes, we invest in farmland.
We also invest in wineries.
Of course, they are an entirely different investment ball game.
But they combine our love of Value Creation, Production Ag Land, & Hospitality.
Our San Giovanni asset is a cool case study.
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Castello di Casole is a 4K acre preserve south of Siena, Italy.
In the early 2000's the property was converted into a world-class resort, Belmond Castello di Casole.
The resort is amazing:
Our firm participated in the initial capitalization & profitably exited.
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After our exit, we maintained a relationship with the resort's developer Timbers Resorts.
Then BREXIT hit.
In 2016, Euro financial markets were in turmoil.
We got word of 133.5 acres adjacent to Belmond that could be purchased for a song.
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The property was San Giovanni Farm.
It included:
Both:
Given our basis, there was potential to renovate/restore each.
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The renovation of the villas to make “on par” with Belmond resort units was in our relative circle of competence.
Revitalizing the vineyards & operating a world class wine/olive oil business was a different story!
We needed world class operating partners.
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In wine production we found this in Michael Kennedy Kennedy & Marc Gagnon.
They clearly stood out.
Their relative experience & accolades were clear.
Their humble excellence & authentic love of their craft sealed the deal for us.
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Francesco Baffetti was young but highly respected.
His vineyard mgt. firm worked with some of the great estates in the region.
Michael & Marc were impressed with his wine and more importantly his character.
As were we.
We had the team.
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Easy to define right?
The deal would have a unique investor profile.
A complex long term hold without short term cash yield.
We knew a key would be a unique ability for an LP to enjoy ownership.
Pool would be existing HNW relationships.
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So we structured the investment as 12 units.
A unit gave an LP:
8% pref, 75/25 split.
Scarcity & interest was created.
Units filled and we closed on the land.
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Fully capitalized, we got to work:
With vineyards restored, our team began wine/olive oil production.
We have been pleased of the results.
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Our hope for San Giovanni's wine was for it be reflective of the incredible land that surrounded it.
Under the guidance of Gagnon-Kennedy "La Caccia di San Giovanni" was produced.
We have been thrilled the wine and its reception.
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Our next phase is Borgo Bonelli.
We are renovating historical structures into additional units & wine production facility & developing new vineyards.
It's the next step to make Casole d'Elsa a world class wine destination.
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We really like the niche.
Our's require a unique investor profile.
For this investor, the opportunity is to provide:
(1) long term capital preservation
(2) meaningful connection to the place/operation they own
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1) Create "virtuous cyles of mutual benefit" with operating partners.
2) Create "experience" for LP's that adds value to their investment.
3) Create secondary market for "units". Two of our LPs sold a quarter of their unit for a >20% gain.
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All credit for this deal go to Dean Macfarlan , Mac Macfarlan , Morgan Stallings & our Macfarlan Capital Partners team.
Winery investment in Italy is hard work, but some body has to do it!
I am grateful to work with such excellent & good people.
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This was fun to put together.
If it was valuable for you, let me know.
Will prompt me to do more of this.
Appreciate any feedback/questions. ...and grateful for any ways you share this with others.
Cheers (& arrivederci),
Trevor
Family Office Investor
1 年Enjoyed seeing this post, Trevor! Some folks might have enjoyed learning about the “messy middle” part of this story where MCP and investors carried this thing through COVID and a JV partnership with the first winemakers, but you captured the pre-COVID backstory and the more recent post-COVID pivot well! Always enjoy reading your posts, but I enjoy officing together even more — see you Monday, my friend, DL
Very well laid out case study and investment recap. Congrats!,
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1 年This is my dream investment.