Robin Budowski, a wine specialist and enthusiast, had dreamed about owning and running a vineyard for years, and on 28 July 2003 he was closer than ever to realizing his dream. He was putting the finishing touches to an offer to acquire Château d’Agel, a property in the Minervois region in the South West of France. The property, undermanaged and located in one of the cheapest wine AOCs, would be turned around on three dimensions: (1) improving the wine quality, (2) supporting the property’s reputation with marketing campaigns, and (3) equipping it with the appropriate distribution channels. Château d’Agel seemed like the perfect candidate for a buyout. But a number of issues had to be solved before closing the deal. How would Robin structure the transaction so as to have minimal tax exposure in France and even less exposure for his investors, mostly non-French Europeans? The pure financial returns of wine properties are relatively modest, in particular when adjusted for the risk of agribusiness operations. So Robin needed to go after passion investors, i.e. enthusiasts. These investors expect large “affiliation” benefits from owning part of a vineyard. But how do you attract enthusiasts, in this case wine lovers, as investors? In other words, how do you maximize the non-financial benefits in the investment package?
