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Natwest strikes £100 million deal with drinks platform Ferovinum
A £100 million deal between Ferovinum, NatWest and BCI Capital could transform how banks deploy capital into the UK wine and spirits sector.
London-based Ferovinum, a funding platform for the wine and spirits industry, has struck a landmark deal which could change the way that capital is funnelled into wine and spirits businesses.
The agreement will see NatWest lead the portfolio funding arrangements for Ferovinum, which was founded in 2018 by finance experts Mitchel Fowler and Daniel Gibney, and uses structures adopted by investment banks in commodity markets to access capital from credit funds, banks and other institutions.
With clients including canned wine company The Uncommon and The Glenturret distillery, Ferovinum will now see £80 million come its way via a “phased transaction” from Natwest, with the remaining sum contributed by Ferovinum equity investors and UK credit manager BCI Capital, which has been Ferovinum’s primary portfolio funding partner since 2021.
It is hoped that the deal will unlock larger-scale capital provision to wine and spirit businesses, and improve access to capital in a sector that has historically been hindered by its fragmentation and long maturation times.
Ferovinum has confirmed that the £100 million will be deployed into a wide range of wine and spirits companies over the coming months. The capital will also support “an ambitious UK and global expansion plan” for the platform.
Founder and CEO Mitchel Fowler believes the deal will pave the way for a “new, technology-driven era of investment in the sector”.
“We are thrilled to have NatWest on board as our first banking partner in a deal that marks a real step-change in how capital is deployed into the wine and spirits industry,” he said.
“Ferovinum’s technology has been custom built to overcome the barriers that have previously stopped institutional capital reaching this sector, giving banks the right tools to get involved. NatWest immediately recognised our platform’s potential, and we have been impressed by their ability to leverage industry expertise and a shared commitment to innovation and supporting small and medium sized companies as they grow.’
With more than 30 clients including distilleries, wineries, merchants and bottlers, Ferovinum has so far funded the equivalent of more than 5 million bottles.
It works by creating a ring-fenced platform that holds assets during the production, storage and distribution of wine and spirits, allowing companies to convert their maturing stock into a just-in-time asset. This flexibility allows businesses to access capital when they need it, reducing their liquidity risk and reliance on payment terms, as well as protecting profitability should supply chain disruptions occur.
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