Philip Gearing left a 20-year investment banking career behind to start a small wine investment firm in 2001, seven years before Lehman Brothers collapsed and thousands of bankers found themselves on the streets. But it was the financial crisis that proved to be the turning point for his new firm.
“In the aftermath of the crisis, people were looking for safe havens to put their cash – across the world – and I had a lot of calls from former colleagues interested in investing their money,” he says.
There was another benefit – the availability of young graduates from top universities who had plans to go into the City. “Four graduates – including my son Thomas – started with us in the aftermath of Lehman’s collapse when jobs in the City were at a premium. This really helped.”
Gearing worked in derivatives trading at Goldman Sachs and Tokyo Mitsubishi (now MUFG), where he led a team of “80-100 traders” in its derivative swaps business. In 2001, he left banking to launch Cult Wines, which initially sought to bring some price transparency to the fine wines investment market and later morphed into a wine investment manager.
“I’d been interested in fine wine for a long time, taking Tom along on these holidays for years. I dragged him along door to door around French vineyards since he was eight, largely because his French was better than mine,” he says.
“I hit 40, which is a magical milestone for re-examining your life. I lived in a City bubble, working during the roller-coaster years of creating derivative products,” he adds. “But by 2001 it wasn’t as exciting, and the demands on my time were still huge. I decided it wasn’t worth working from 6.30am-8pm every day and at weekends for a job that was losing its excitement.”
Tom Gearing – who made it to the final of The Apprentice in 2012 – is now a managing director of Cult Wines. The firm employs 32 people – many in portfolio management roles – and counts former City workers including ex-Goldman Sachs bankers among its employees. In July, it hired Patrick Thornton-Smith, a former managing director at fintech firm Duco, as its new commercial director. Right now, it’s recruiting for two portfolio managers.
“We get plenty of people working in trading or other City jobs who want to switch into wine, but most are not suitable,” says Gearing. “You need a deep understanding of the fine wine market, plus an ability to understand clients’ risk appetites and mathematical and quantitative skills. It can be hard to find the right people.”
Gearing says that the business has gone through a “fairly conservative development stage”, but the past five years have seen rapid growth. It was turning over £1m in 2010, but by 2016 it had revenues of £22m and he says it’s expecting £33m in 2017 thanks to increased interest from high net worth individuals in Asia.
“I’m a big defender of bankers and the banking sector,” says Gearing. “But there are far too many people in the sector just happy to be surviving in a difficult environment. Life is far too short not to try and do something more interesting.”
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